If you didn't attend the webcast, Understanding Executive Issues with Employee Engagement & How to Increase their Support, with Dr. John Sullivan and moderated by Garry Kranz, Contributing Editor, Workforce Management, you can view it on-demand at: http://www.workforce.com/webcasts/may2012-engagement
Questions related to increasing executive and manager buy-in:
1. Engagement is not a priority for our organization. What can be done to increase the buy-in of senior leaders on the need for engagement programs?
John Sullivan: I find that executives are relatively easy to understand, they care about dollars first and then on what they are measured and rewarded on. They may say that other things are important but in my experience, if they're not directly measured or rewarded on a factor, then it won't get much more than lip service. Executives are usually measured on corporate goals, their own personal goals or objectives and the factors in their bonus formula. Executive compensation can tell you what specific factors they are rewarded on. Obviously if you want them to care about engagement, you need to show a direct connection between lower engagement scores and something they are measured and rewarded on. So if you're really bold, work with compensation to include engagement scores and improving engagement in their performance and bonus criteria, if you do, surprisingly you will find that they will be calling you and asking for your help on improving engagement. A second approach is to show a statistical correlation between a fall in engagement scores and a fall in revenue or business results. If there is no connection, your best option is to apply engagement actions to a weakly performing business unit in order to turn it around or to use the split sample approach that I referred to in the webinar. Be careful of making connections between engagement and turnover, because not all executives consider turnover a negative thing. If you use turnover, work with the CFO office to calculate the dollar cost of the turnover and present that dollar impact before you mention the turnover percentage rate. A final but weaker alternative is to convince business unit leaders of the value of engagement and have them lobby the CEO and CFO.
2. You've talked about getting executive buy-in on Engagement. If the survey identifies areas that executives themselves need to change, how do you make sure executives "hear" the feedback and actually change?
JS: Most engagement surveys do show that executives and their actions are a primary cause of low engagement. I find that executives must first see that engagement has a direct impact on productivity, retention and innovation before they will take any of your engagement results seriously. But even after you convince them that engagement has an impact, it is a harder sell to convince them that" they" are part of the problem. Because executives are focused on money and business goals, I find that the most effective way to get their attention is to demonstrate that business units with low engagement scores have weak business results and vice versa.
3. Working in government with a low turnover rate, how do you obtain executive support for engagement?
JS: The key in a low turnover environment is to shift the focus away from retention and toward productivity and meeting organizational goals. You need to be able to show that service levels, goal attainment and quality improve when employees are highly engaged. It's also important to remember that there are many factors that impact productivity, so you need to involve workers in determining the barriers to productivity and innovation.
Questions related to actions for improving engagement, innovation and productivity:
4. What kind of actions have you seen listed?
JS: I presume from this question that you mean what actions do HR departments and managers normally take to fix problems identified in the engagement survey. To start with, obviously the actions that you take should directly relate to the individual problems that are identified in the survey. However, there are standard actions that many organizations take. There is no master set of engagement actions but normally the list includes acknowledging the employee's concerns, increasing work/life balance, putting together a task force to fix any broken HR processes (i.e. career development or progression) and educating the workforce about actions that management is taking in each area of concern. Additional common actions include improving career progression, improving recognition, improving training and development, fixing bad managers and improving two-way communications.
5. What are some examples of "doing employee engagement"?
JS: Generally when that phrase "doing employee engagement" is used, it refers to the actions that HR and managers take as a result of receiving lower engagement rates from a survey. Obviously, you can't just take actions at random, so your actions should directly emanate from the individual engagement problems that were identified in the survey. Some engagement actions are relatively cheap and easy, like improving employee communications, while others, including increasing pay and benefits, are both more difficult and expensive. Whatever the actions, the basic goal is to increase employee loyalty and motivation to do more work.
6. Is there any logical grouping or hierarchical order to factors impacting talent management - for example: gaps are i) imprecise career paths; ii) engagement; iii) skills development, iv) subjective performance assessments; v) etc... Are there rules about which is foundational and which is built on the foundation?
JS: An excellent question. Of course every organization is different but if there was a single universal factor it would be weak managers, who are the primary cause of low productivity, low innovation, low engagement and high turnover. In my experience, the next most powerful impact factors are rapid learning and "doing the best work of your life". Firms like Apple are highly successful despite a relatively harsh and secretive management approach simply because the work itself is so important and exciting. Having unclear career paths is also mentioned in many surveys but firms like Google and Apple are notorious for having imprecise career paths but they are still productive and innovative. It's also true that the performance appraisal processes is mentioned as being too subjective, but this is true at almost every firm, except in the rare cases where managers rely on metrics and data, rather than opinions in their assessment. The Gallup organization has a list of productivity factors (i.e. the twelve questions) that have been developed over many years and I find them to be quite accurate.
7. How can managers boost employee engagement while dealing with budget and staff reductions?
JS: When resources are extremely limited, the most effective approaches for improving engagement involve shifting at least part of the burden to your employees. You can ask them directly or put together a team of employees to identify the most appropriate actions to improve engagement and productivity. You should also use employees to identify barriers to increasing productivity and innovation. Obviously you should try to identify "low hanging fruit" which usually include action tools like improved communications and best practice sharing. Both cost very little but they usually have an immediate impact.
8. How do we become experts on productivity vs. Engagement?
JS: First you have to decide if you are in the "survey business" or whether you are trying to impact business results. If you are results oriented, you have to identify and focus on all of the factors that affect productivity. There are at least twenty and engagement/motivation is only one of them. I recommend that you work with managers and employees to identify the factors that increase productivity and the barriers that decrease it. Then you need to benchmark both inside and outside your organization to identify the most effective "tools" for increasing it. I recommend that you provide managers with a "toolkit" that allows them to select which individual productivity tools seem most appropriate for their situation. Some productivity tools that I recommend include "how to best manage me", what motivates you?, How the best learn and best practice sharing tools.
9. What do you do with the results. How can you ask questions on surveys to get results that you can take action on?
JS: Negative survey results add no value if nothing is done to resolve the issues that they raise. In my experience, the best way to ensure that you take the "right action" is to ask employees to provide feedback on what they would like to have done. You can do this right in the engagement survey by following up any question about any issue or problem with a section that allows the employee to select their recommended actions from a provided list. An alternative approach is to track the effectiveness of the actions taken by different managers to resolve the same issue in the past, in order to specifically determine which actions were the most effective. In the cases where managers refuse to take action, the best approach is to quantify the dollar impact of the lack of action on productivity, work quality, attendance, innovation and turnover and report it to both the manager and their boss.
10. What are some ideas on how to support mid-level managers to act in an effective manner about Employee Engagement even if there is no Executive support or acknowledgement?
JS: Athough the support of senior executives is highly desirable, many organizations have successfully increased engagement, productivity and innovation without it. The most effective "mid-level" approach that I have seen involves providing managers with a "toolkit" which allows them to select the tools and actions that are most appropriate for their situation. Larger firms are now using internal social media and wikis to connect managers with similar engagement and productivity issues. The support from other managers, the ability to ask questions, along with a more effective sharing of best practices has an immediate impact without much cost or effort on the part of HR. Asking individual managers that have successfully resolved engagement issues to volunteer to act as virtual mentors can also be effective.
11. Do you see a difference in the engagement strategy for Baby Boomers and the succeeding generations?
JS: If you work in a global organization, it is extremely difficult to generalize about common characteristics of generations around the world. But given that caveat, it is certainly true that surveys of new generations show that they have less respect for corporations and that they don't intend to stay in any job for more than a few years. But since you're hiring individuals, your recruiting process needs to sort through the masses and select only candidates with a high level of excitement and commitment. Longer tenured employees are generally more engaged simply because they made a decision to stay long ago. And older employees may have fewer job choices, so they are more likely to accept what they have.
12. Do Google and Apple push increased engagement from HR? Or is it upper management with HR implementing tactics/programs such as measuring length of the line at the coffee bar?
JS: Both Google and Apple understand the value of great people management but in my experience, they rely less on centralized HR to provide direct help than most organizations. In my analysis, they focus more on hiring passionate and engaged individuals, than they do on tracking employee engagement. They both realize that increasing innovation is everyone's job. In addition, other important factors like productivity, collaboration, speed and agility are too important to be left to a single overhead function. It turns out that if you hire self-motivated, bright and agile people and you allow them to do the "the best work of their life", those two things alone will get amazing results.
13. Our CEO and top HR Leader recently separated from the organization, about three months after the results of our most recent survey results were released. What is the best strategy to get the new CEO and HR Leader engaged into developing an organizational response? Please note action planning is now occurring at the department level.
JS: Delaying the responses to any employee survey can be a major problem. When employees and managers take the time to fill out the survey, they almost always expect a quick response outlining the results and an action plan to resolve any identified issues. It doesn't take a rocket scientist to understand the problems caused by a long delay in reporting results, so my first recommendation would be simply to approach them and to ask them to act right away. My alternative recommendation would be to have the CEO announce that their response would be delayed for X weeks, until they can learn more about the issues and the effectiveness of the previous responses.
14. Do you have examples of those motivation questions from the hospital you spoke about?
JS: Baptist health care in Pensacola Florida provides all employees with a personalized motivation questionnaire. For example, employees are provided with a list of ways in which they can be recognized for good work and they then rank each on a scale, based on which one would have the most impact on them. The list of recognition factors includes a pat on the back, a small token of appreciation and acknowledgment in a staff meeting or in a company newsletter. There are other approaches and most of them involve providing a list of available motivators and the employee is then asked to choose the ones that would have the most impact on them.
15. Why is employee health and wellness not on the list of factors that increase productivity?
JS: Health and wellness is included under number 19 on the slide, outside of work issues. This item can also include family issues. Each firm should determine the specific productivity factors that have the most impact in their environment.
Questions related to proving the impact of engagement:
16. When you are trying to gather data for a sample: how do you eliminate all other variables to indeed prove a connection between engagement and increased productivity?
JS: A split sample with a control group is designed specifically to control all other variables. It is a standard approach that is used by many corporations to prove whether their products or advertising work. By definition, the control group "controls" for the other variables. In contrast, a pilot implementation does not control for other variables. In all cases, it's a good idea to work with the CFO's office in advance to ensure that your process for proving impact is logical and it has no major flaws.
17. What about a smaller organization without multiple divisions - how would we link engagement to results without that failing division "test case?"
JS: In smaller organizations, rather than selecting an entire division, instead select some poor performing teams or functions to demonstrate the impact of engagement. In some cases, the CFO's office will allow you to utilize a simple statistical correlation to show the connection between the scores and a rise in productivity or revenue. It's always a good idea to work with the CFO's office in order to determine in advance what approach would be credible and what approach would not be acceptable.
Questions related to reporting engagement results:
18. How do we evaluate how critical our workforce (engagement is) at different levels?
JS: The key to getting data from different job levels is to code your surveys with a job code so that you can identify the job level of the responders. It is still possible to have an anonymous survey but to be able to identify the job family or job level of the employees with low engagement scores. Most engagement surveys show that executives and those higher in the organization chart almost always have higher engagement levels (this may be because they have more control over their job). If you also prioritize your jobs so that you identify those with the highest business impact, you can then focus your engagement actions on those jobs, whether they appear at the top, middle or bottom of the organizational chart. You can also include a code for recognizing individual business units. If you're willing to give up anonymity in your survey, you can even track engagement levels back to the individual.
19. How can we evaluate employee engagement. If this is a survey how do we follow up with employees on the results?
JS: There are several ways to evaluate any "soft" program. The most powerful is ROI, showing that the value of the benefits that the program provides is much higher than the cost of the program. A second weaker measure is to survey all managers and ask them to rank all overhead functions and services based on how much they contributed to the manager reaching their business goals that year. In the survey, you simply list all of the overhead functions and have them select the ones that the manager feels contributed the most (i.e. cost accounting, purchasing, recruiting, engagement etc.). The weakest option is to survey employees or managers to see if they are "satisfied" with the engagement process and its execution.
20. We have our employee's review the data in small groups with their leader, so they own the data and agree upon actions rather than expect others to solve the problems. They are accountable for the solutions. No open ended questions are included. That is left of open discussion. Engagement is built into the debrief process.
JS: What you have described is an excellent approach. Rather than shot gunning actions across the entire organization, you are localizing them. The only thing I would add to your process is to develop an interview or survey approach for employees and managers to identify the barriers that restrict increases in productivity and innovation. This process of identifying the factors that prevent employees from doing more has a major and immediate impact.
Questions related to metrics and measurement:
21. How do you capture innovation on the front lines? The things an employee does differently that reflect a new innovation?
JS: First you have to set a definition for what is innovation. Normally it includes at least a 20% improvement in product features, quality or results, compared to the existing product, service or process. Some organizations use the term "implemented innovation" to differentiate things that are actually put into practice, compared to simply having creative ideas. If the leader sets innovation as a primary goal at the beginning of the year, it is much easier to increase innovation in those areas. In some cases, you have to attribute innovation to a team, rather than to an individual.
22. What exact metrics can we measure?
JS: Metrics are really simple, you need one for each major goal and problem area. Work with the CFO's office to identify what data is available and what are the organization's strategic goals. With engagement, you must show a direct connection between a change in scores and a change in productivity, innovation, output or goal attainment. Intuitively, almost everyone believes that there is a connection between engagement and performance but metrics allow you to move beyond beliefs and to prove it with numbers. The best single measure of effective HR is the ratio of dollars spent on labor and the revenue or profit of the organization.
23. How could I measure engagement when our organization has no measure on productivity? (This is In a University setting)
JS: Every organization (whether they are profit or non-profit institutions) has yearly output or results goals. These goals are usually broken into categories including volume, dollars, time, quality and satisfaction. At my university, goals include the number of students admitted, the number that graduate on time, job placement, money raised and student and faculty satisfaction. US News, Business week and various guides to selecting a University all include criteria and goals that can be used to measure the effectiveness of universities each year. So I often recommend that you use these already set performance criteria because they have been proven over many years. Once again I recommend that you work with the VP of finance to determine what they consider to be productivity and what is the best way to show that higher engagement scores result in an increase in productivity.
24. Having trouble understanding examples of engagement scores. Just surveys?
JS: The typical practice is to measure employee engagement through periodic employee surveys. Some surveys are done in-house, while others are done by outside vendors. Surveys can be inaccurate if your employees don't take them seriously (this usually occurs because past surveys have not resulted in any meaningful change). You can also target your surveys to particular functions or business units. There are alternatives to the survey, which can include utilizing focus groups or interviews with a sample of your employees to assess engagement levels. Engagement scores are usually reported as a percentage (i.e. the percentage of all employees that are highly engaged, the percentage with average engagement and the percentage with low engagement). The engagement numbers from this year are then compared to the numbers from last year. If you use an outside vendor, you can compare your scores to other firms.
25. Actually engagement is down now...people feel overworked and underappreciated.
JS: Engagement scores may well be down at your firm because of how workers have been treated. But the fact is that they would be down even further if factors like high unemployment and layoff rates didn't make your current employees feel more engaged (because at least the firm has provided them with job security). That is why you should adjust engagement scores either up or down based on these environmental factors that are outside of your control.
Questions related to turnover:
26. Is high turn-over then an indicator of underlying issues?
JS: High turnover is usually an indication of issues but there are exceptions. High turnover might mean you have great employees and a strong external image, so it is only natural that external recruiters will raid your employees simply because they are so desirable. Having too low of a turnover rate can actually be an indication that external recruiters do not view your workers as worth recruiting. The best way to determine the causes of turnover are to use post exit interviews to anonymously ask key employees why they left six months after termination. Gallup has done some excellent research in this area and they report that 75% of the cause of turnover can generally be attributed to something that the manager did or didn't do. As a result, I recommend implementing a bad manager identification program as a first step in reducing preventable turnover among your most desirable employees.
27. Don't a lot of people lie as to why they leave so that they don't burn any bridges?
JS: Yes, employees do lie during exit interviews. It is easy to find out if people are not telling the truth when they leave. Simply compare the causes of turnover that you obtain from normal exit interviews to the answers that you get using anonymous post-exit interviews after they leave. In my experience, because normal exit interviews are not anonymous and there is a risk of hurting your future references, you should not rely on exit interview results alone.
28. Engagement means "intent to stay" and "increased effort", but is not related to turnover rate? Why? Even though the definition includes "intent to stay?"
JS: Actually neither the conference board nor the Gallup definitions that I provided included any mention of "intent to stay". I emphasize productivity and innovation because they can decrease almost immediately when you have disengaged workers. Turnover problems occur over the medium or longer-term, so you will increase your impact if you focus on engagement, productivity and innovation. It's also important to note that there is some evidence that disengaged workers don't automatically quit. The factors that cause turnover are not automatically the same as the factors that cause engagement.
29. Isn't there a cost to replacing someone? Isn't that the case to make to the CEO or CFO?
JS: There is the cost of replacing employees but the cost is dramatically lower if the employee can be easily replaced or if the individual who is leaving is a bottom performer. The cost of losing a key employee can be 3 times their salary or even more if you include customer impacts. The key factor with engagement is that low engagement may cause an immediate drop in productivity and innovation but low engagement don't always cause immediate turnover. Incidentally, you can never assume that low engagement results in turnover and that high engagement levels prevent it. You must prove that engagement causes turnover using a process that the CFO approves. In my experience, executives are not overly concerned about employee turnover unless you can show that 1) it is preventable and 2) you go the extra step and convert the turnover rate into its dollar impacts, so they fully understand the cost of turnover. Many executives prefer to focus on "regrettable turnover", which includes only high-impact and hard to replace employees.
Questions related to hiring and engagement:
30. How would you recommend measuring engagement during the recruitment process?
JS: Obviously, if you hire individuals that have a history of high engagement or those that are already engaged and passionate about your firm, you won't have to spend as much time working on engagement once they become an employee. Applicants that barely know your company and that simply "want a job" are less likely to be engaged and passionate about your firm and what it does. You can assess the engagement level of candidates during the hiring interview or with a survey questionnaire. After one year, you can then assess whether highly engaged candidates turn out to be more productive and innovative on-the-job. If you find that their initial engagement level makes no difference, then assessing it during hiring is not necessary. But you are more likely to find that if you only hire individuals that know and are passionate about your firm (as well as self-motivated individuals) these new hires will require less effort to maintain their engagement and productivity levels.
31. After hearing an interview from an occupy person on Hannity of his discontent with corps., why would they apply? Why would we need to be concerned of this group? After the introductory period ends and the productivity of a person is not satisfactory, the choice of ending the work relationship may be more beneficial than keeping them....
JS: Because of the large volume of upcoming baby boomer retirements, it is highly unlikely that a growing firm can avoid hiring from the next generation. I certainly do support the concept of proactively terminating weak performers but many managers and HR departments are reluctant to get rid of their turkeys. An alternative approach is to assess individuals closely during the hiring process to ensure that they are a fit for your firm. Companies like Zappos, Google and Southwest go out of their way not to hire non-engaged individuals that simply want a job, any job". Zappos even requires a second interview by HR to ensure that they are hiring people that are passionate about the company and customer service.
32. Do you have any data on how long it takes a new hire to become disengaged?
JS: A great question. You could measure when they become disengaged. If you surveyed candidates during the hiring process on their engagement levels and then repeat the survey every six months to see when the individual's engagement levels went up or down. In my experience, engagement levels can begin decreasing during the first week as applicants begin to realize that the picture that was painted by the recruiter was overly optimistic. There is research to show that at some firms, as many as 40% of new hires quit within six months. The reasons for that early turnover include that the recruiter was less than honest about the job and that the individual's expectations were simply too high. Research by the Aberdeen group shows that 90% of new employees make their decision to stay at a company within the first six months, which could be an indicator that engagement is important during the first six months.
Questions related to revenue per employee measures:
33. Regarding revenue per employee - how do you account for the different factors that affect revenue? For example, Google's products and business model are very different from IBM's. So how do you know which workforce is truly more productive?
JS: Businesses are not tied to a particular business model, so if they stick with a failing one, you have to blame the managers and the employees. Google used to be a search engine and then it shifted its business model to become a phone company also. An alternative approach is to simply calculate the improvement in revenue per employee at your company year in and year out. By comparing yourself to yourself, you can see the improvement in productivity. You can also compare the percentage of improvement in revenue per employee at your firm compared to the average improvement percentages at other firms.
34. How to find out the revenue average in your industry?
JS: Some industry groups and analysts publish the industry average but you can also get it on Hoover's or Bloomberg. You can calculate it yourself among select firms by using the calculator found on wolframalpha.com.
35. Didn't answer my question - sounds like he said success was tied to the business model choices of managers. Seems to underscore my doubts about using revenue per employee as a measure of workforce performance.
JS: You really don't get to select your own measure based on your own personal doubts. You should always work with the CFO's office to determine which workforce productivity measure they consider to be the most appropriate. Revenue per employee is a standard measure used by CFO's in many industries but there are of course better measures. Profit per employee is another measure (at Apple it is over $500,000 per year) and the most effective measure that I recommend is the cost of labor compared to the dollar of profit generated each year (i.e. labor ROI).
Questions on related topics:
36. How do you measure decision-making speed?
JS: In a fast-changing and competitive marketplace, first entry and innovation are essential not just for success but for survival. Making fast decisions with sometimes less than perfect information is a critical component to reducing product time-to-market. You can measure decision making speed by tracking the number of weeks or months that it takes (on average) to a get approval of a million dollars idea or concept. You can also measure the average time it takes from project funding until completion. You can also measure the number of approvals required to find out why decisions are slow. If you find that decision-making speed is slowing, you can then take actions to speed it up.
37. How well does Dr. Sullivan feel executives understand organizational culture and its role in performance?
I have never met an executive that didn't feel that they fully understood their organization's culture. But the reality is that culture means many things to many people and almost no one uses a common definition of it. If you actually measure an organization's culture, almost every time you will find that it doesn't match what executives think it is. In my experience, converting" culture" to the desired behaviors, actions, measures and rewards makes any culture easier to understand and adhere to. Because a corporate culture is designed to enforce desired behaviors, spelling out in writing the direct measures, rewards and punishments for each desired behavior is also essential. Organizational performance is most often negatively impacted when executives post one set of values and behaviors on the wall but they recognize and reward a completely different set.
38. How do you manage an employee's sense of entitlement for "stuff" within an organization?
JS: Entitlement is when an employee believes that they have the right to continually get something, once they have been initially provided with it. The most effective approach for limiting entitlement is to make any benefit contingent upon a certain level of performance. And obviously you have to adjust the benefit when performance goes down. You also need to educate workers, so that they understand that these factors can only be provided when performance, revenue or productivity goals are met. Obviously if you never vary the factor or benefit, employees may get the sense that they deserve it. Fighting the entitlement mentality is especially difficult in large bureaucracies and in a union environment.
39. A supervisor has told an employee that he puts out much effort to satisfy her but he is not growing? How can this employee move from present stage to the growth stage as being suggested by the supervisor?
JS: Not every employee is focused on the future, so it's not unusual for an employee to be focused exclusively on doing their current job well. I have found that if you want an employee to shift into growth mode, you must first tell them not just what you expect, but also why you expect them to grow. If the growth eventually means more job security, a promotion or a pay raise, you have to let the employee know that. Many employees are not confident in their ability to grow, so you might also need to have their manager encourage them and to reassure them periodically that they can successfully grow and learn. And finally, the employee may need direct help. As a result, the manager should agree to help them develop a growth plan and also agree to work with them directly or to provide them with a mentor to help them grow. Unfortunately, some workers are simply not interested in growing, so in those cases, you need to accept that fact or begin steps to replace the worker with someone that has growth capability.
View the full webcast on-demand:
Understanding Executive Issues with Employee Engagement & How to Increase their Support