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Why CEOs are Gung Ho over employee engagement

/ 12:10 AM March 19, 2017

For Jack Welch, the iconic CEO of GE, the three most important measures of organizational health are employee engagement, customer satisfaction and cash flow.

Surveys over time found a positive correlation between employee engagement and talent retention, operating income and earnings per share. Engaged employees are 1.5 times more likely to perform better and five times more likely to stay. Low levels of engagement result in lower customer satisfaction and productivity, higher employee turnover and apathetic culture.

Engagement defined

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Roughly 11,000 respondents helped the Institute of Employment Studies in UK to distill a suitable definition of employee engagement in Europe. It means “a positive attitude held by the employee towards the organization and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization.” The USA-based Conference Board, on the other hand, defines it as “a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work”.

Obviously, engagement doesn’t happen as a matter of course. It cannot be injected from outside. There is no one, single way to engage employees – much depends on the demographics, the organization’s environment, and the tasks at hand. Punitive measures don’t work. Making work fun doesn’t mean making it easy.

Measuring engagement

Engagement is different from the drivers of engagement. The Conference Board has determined the following most significant engagement drivers: trust and integrity, nature of the job, line of sight in performance, career growth opportunities, pride about the company, co-workers, employee development, and relationship with the manager. Gallup was emphatic with a now popular survey finding that “employees don’t resign from the company; they resign from their bosses.”

Annual engagement surveys could be tricky at best, and useless at worst. Many surveys don’t measure engagement; they measure only the presence of the drivers of engagement. Mere presence doesn’t make an employee engaged. Even if the employee sees that there are growth opportunities, but he hasn’t experienced career growth after ten years, he would not be engaged. But when asked if there are career growth opportunities, he would respond “Yes.” Voila, you go a high engagement index!

Another tricky part is that some HR people don’t understand that there are three levels of engagement – satisfaction, commitment and advocacy. Most engagement surveys simply measure employee satisfaction. A high score in the survey is often misconstrued as indicative of high employee engagement index, but employees still seem to lack commitment.

Emerging challenges

Changes in technology, demographics, and the nature of work make engagement strategies in the past ineffective in the future. Here are emerging challenges in engagement:

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Changing demographics. The Philippines has the second lowest average age in the ASEAN. As the Boomers are slowly but surely exiting the workplace, the Gen X and Y comprise the majority. Gen Y and Z employees, loosely called Millennials, have differing motivations and will respond differently to retention and engagement strategies that appealed to the Boomers and Gen Xers. Open and frequent communication, social media, great company culture, involvement with worthy causes, sense of purpose and achievement appeal more to the Millennials.

Compassionate leader- ship. Gallup’s findings that people quit their bosses, not their companies, will be even truer. Today’s employees choose who they work for and prefer to work with inspiring and compassionate leaders that are authentic, have dignity and integrity, and show empathy.
Work/Life integration. Employers of choice no longer compel employees to work 8 to 5 everyday. “Work at home and home at work” is getting to be a norm, as long as the numbers prove that this arrangement is working well. I am writing this article at 730pm at a coffee shop near my home, and I am wearing shorts, slippers and a Meralco Bolts T-shirt given to me by Ryan Gregorio, former basketball coach, now HR person.

Big data analytics. As Deloitte’s Josh Bersin aptly observed, “The Geeks have arrived in HR.” People analytics will allow big data to provide better alerts when engagement trends fall in relation with KPIs like sales, customer satisfaction, turnover, etc. Hard data and more pro-active interventions like “stay interviews” as opposed to “exit interviews” will help pre-empt massive turnover as they predict when people will likely quit.

Technology’s focus on employees. Sooner than later, there will be more apps such as “pulse tools, feedback apps, and anonymous social networking tools.” Annual performance appraisals will outlive their usefulness, as apps for real-time check-ins with employees to compliment them for a good job or help them where they are challenged will mutually benefit boss and employee and drive engagement higher.

Simon Sinek, author and marketing consultant said, “When people are financially invested, they want a return. When they are emotionally invested, they want to contribute.”

(email at erniececilia@ gmail.com)

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