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Special Report on Employee Engagement Losing Lifeblood

Disengaged employees worry companies for many reasons, including the potential loss of top performers, sagging productivity and less commitment to customer service. In the case of LifeGift, the stakes are much higher: Disengaged employees at the Houston-based not-for-profit could be a matter of life and death. The company recovers human organs and tissue from recently deceased donors and matches them to recipients on transplant waiting lists across the U.S.

   “If we don’t recover the organs, it means people probably lose their one opportunity for a life-saving transplant,” says Samuel Holtzman III, president and CEO. “So in our organization, engagement means having employees who never give up on finding a donor. Not ever.”


That’s why Holtzman made employee engagement a priority when he took the helm

nearly four years ago. Surveys are commonly used to gauge employee sentiments in the health care field, but LifeGift lacked insight into the attitudes and behaviors that influence the commitment level of its 135 full-time employees. “Without that, we were missing an important element in our organizational development,” he says.

So, LifeGift began measuring engagement annually in 2008, using a seven-point survey tool administered by LeadershipIQ, a research and consulting firm in Washington, D.C. The scale measures engagement levels from low to high, and LifeGift’s scores have consistently been “in the 6.5 to 7 range.”

But after seeing lower engagement-to-manager scores on its last survey, Holtzman required that the company’s team of 14 managers initiate quarterly one-on-one discussions with each of their employees, “separate and apart” from yearly evaluations.

Analyzing the results on a yearly basis ensures that employees receive the training, emotional support and other resources they need to cope with the demands of the job, Holtzman says. Indeed, the work can be quite stressful. LifeGift’s “consent managers,” usually registered nurses and other clinical professionals, must approach grieving families about donating the organs or tissue of a loved one. Respiratory therapists, meanwhile, rush to intensive-care units to keep oxygen and fluids flowing until surgeons are able to retrieve the organs.

Most organizations don’t face that kind of pressure, but concerns about employee engagement are growing across most industries and countries. A variety of research studies this year have found that stressed-out, recession-wracked employees are tuning out at work.


In a June report by LeadershipIQ, 69 percent of North American workers said they are either disengaged or “underengaged.” The results are based on responses from 102,311 employees and managers at 130 organizations, mostly in the U.S.

The finding shouldn’t come as a surprise, says Mark Murphy, LeadershipIQ’s CEO. Companies let engagement slide down their priority list as they trimmed workforces and training budgets during the recession. After three years of neglect, organizations now are feeling the effects. Engagement is like visiting the dentist, Murphy says. “You can decide not to go for a while, but eventually it catches up to you in a painful way.”

Leaders, as well as rank-and-file workers, are feeling less motivated, according to LeadershipIQ’s study. More than half of frontline supervisors report being either disengaged (8 percent) or “underengaged” (44 percent). Fully one-third of middle managers–often the group from which organizations cull their top performers–voiced similar sentiments, as did 30 percent of executives.

LeadershipIQ’s study echoes findings of a report in January by BlessingWhite Inc., based in Skillman, New Jersey. In North America, only 33 percent of employees identified themselves as engaged. That means the other two-thirds are likely to leave at the first opportunity, says Christopher Rice, BlessingWhite’s president and CEO.

Pitney Bowes

Perhaps more troubling: Some engaged employees are restive, as well. One percent of engaged employees say there is “no way” they will stay with their organizations during the next 12 months. Eighteen percent say they “probably” will stay. “And ‘probably’ isn’t a good answer,” Rice says. “It means those people are likely to listen when headhunters come calling.”

Precipitous drops in engagement were not confined to North America, according to a preliminary 2011 report by Kenexa Research Institute in Minneapolis. Kenexa’s study found that engagement levels have tumbled in most major economies. In the survey of nearly 30,000 employees, Kenexa’s employee engagement index score for U.S. workers is 58 percent compared with the global average of 53 percent. (See “The Last Word Cultural Awareness.”) As a worsening economy triggered more and more layoffs, employees began to despair, says Jack Wiley, the institute’s executive director. “People had reached a sense of burnout,” going without raises while also taking on increased workloads.

Despite the gloomy picture painted by the studies, some organizations say they have managed to sustain engagement levels during the prolonged recession. Typically, those employers systematically gathered feedback from employees, analyzed responses and implemented changes as needed, Wiley says. “They measure engagement with the same rigor they apply to customer service or financial data.”

For decades, Pitney Bowes Inc. dominated the market for postage meters, which enable organizations to print postage directly on letters instead of buying stamps. Postage meters are still a signature product, but the advent of online postage and other factors pushed the Stamford, Connecticut-based company to diversify its business, leading to a string of acquisitions. Over time, the $5.4 billion company’s workforce swelled to 30,700 people in more than 100 countries. “The catalyst was our growth, and the recognition that we lacked a good way of getting feedback from them,” says Andrew Gold, Pitney Bowes’ executive director of global benefits planning.

Who's Engaged/Disengaged

Before launching its first survey, Pitney Bowes defined what engaged employees “look like,” says Scott Irgang, director of labor relations. In particular, engaged employees “take an active interest in the vision, the productivity and the future growth of the company. They understand how their piece fits in the whole puzzle. They speak well of us [to people outside the company], and they mean it.”

About 80 percent of employees fill out the engagement survey each year, giving them the chance to share their views and help the company address problems that otherwise might go unnoticed, Irgang says. The most meaningful part of the survey is the “verbatim” section, “the empty box where employees get to share their ideas.”

The annual survey also is used to determine if Pitney Bowes is doing enough to meet people’s career aspirations. “We are constantly looking at the career-to-engagement link,” Irgang says. “We know there’s a ‘wow’ factor that comes with making a commitment to career development.”

Perhaps. Yet comments posted anonymously on career website Glassdoor.com suggest repair work is needed. “Good for getting experience, not great for creating a career,” writes one Pitney Bowes’ senior sales executive. “What advancement opportunities?” asks another veteran Pitney Bowes worker.

Engagement by Age

Pitney Bowes executives say they are aware of such comments, and they appear to be listening. This year, Pitney Bowes is piloting a “manager capability program” at some of its business units. The program combines online assessments and performance tools with instructor-led training. Managers already are held accountable for helping employees plot their next career move and identifying highly productive contributors for assignments that could lead to advanced responsibilities, Irgang says. The new initiative is intended as a “coaching and self-assessment tool” to augment Pitney Bowes’ existing manager training and leadership development, he explains, especially for skills such as listening, change management and problem-solving.

Managers are often the weakest link in the engagement chain, says BlessingWhite’s Rice. In his company’s January report, 20 percent of respondents cited career advancement as a key driver of engagement. “Yet many organizations aren’t training managers to initiate career discussions,” he says, “even though it has huge implications for employee satisfaction.”

Some companies also are collecting engagement measures but not putting the data to good use. Asking employees to volunteer their views implies a promise that the organization will take action, says LeadershipIQ’s Murphy. “This is something we see way too often: Organizations will talk a good game when it comes to engagement, but they don’t actually do much with the data” and are surprised when engagement levels sink.

Costco Wholesale Corp. is one company that shuns formal surveys. “We are adamantly opposed to participating in beauty contests,” says John Matthews, the Issaquah, Washington-based warehouse club company’s senior vice president of human resources and risk management.

Costco measures engagement in terms of productivity, or sales per employee hour. The goal is to get more productivity from each worker this year, Matthews says. “Whether you’re a meat cutter, a baker or folding clothes on the floor, we’ve got a way to measure your productivity.”

That conjures up images of efficiency experts scurrying around and checking up on employees, but Matthews says that isn’t the case. In fact, engagement is not a stated goal for the company’s 155,000 employees worldwide, Matthews says. Rather, he adds, engagement is a “byproduct” of the way Costco treats employees, including striving to pay wages that are “demonstrably better” than its competitors.

In addition, an “open door” policy enables employees to communicate directly with Costco’s top executives on a regular basis. It breeds a culture of transparency that makes surveys unnecessary, Matthews says. “Our employees are candid, and they tell us when we screw up.”

Costco’s approach seems to be working. Using productivity as a metric of engagement is only possible, Matthews says, because employees are in it for the long haul. During 2010, Costco’s companywide turnover averaged about 10 percent, he says.

Ultimately, employee engagement involves compensation, not simply career advancement. “When companies are asked to define career advancement, they think about training and development programs,” says Ilene Gochman, a Chicago-based consultant who heads the organizational excellence practice at Towers Watson & Co.

“When employees are asked to define it, they think about higher pay or better benefits.” That point is borne out in Towers Watson’s Global Workforce Study 2011, which found that 61 percent of employees define career advancement by increased compensation. Among U.S. workers, the figure jumps to 71 percent. “There’s definitely a ‘show-me-the-money’ piece to it,” Gochman says.

Workforce Management, July 2011, pgs. 24-26, 28Subscribe Now!