Category Archives: Engagement

The Ripple Effect of Disengagement

Our previous post focused on ways of reducing the costs associated with disengaged workers. While the most obvious course of action might simply be to increase the percentage of engaged workers, doing so is no easy feat! It’s also important to recognize the specific ways in which disengaged workers impact an organization’s bottom line or, stated another way, to identify and quantify the waste!

During meetings with our Partners in Improvement, these costs were discussed in detail. The Partners concluded that disengaged employees create a negative and expensive ripple effect throughout an organization, and drive-up costs in numerous ways:

Higher turnover: Disengaged employees leave their employers as soon as they see a better opportunity. The turnover increases the costs of recruiting, on-boarding, and training, (1.5-2x annual salary as explained in a recent post), and significantly more for higher-level executives based on a Center for American Progress study. Every new hire brings a risk of a bad fit, and every employee leaving an organization takes with him or her some organizational knowledge that might have been helpful to that organization in future decisions.

Lower productivity: Disengaged employees don’t go the extra mile; they do not make an extra effort when faced with a challenge, and don’t put forth the same discretionary effort that an engaged person will make. A 2013 article from the Harvard Business Review concluded that organizations that cultivate high employee engagement yield a 22% increase in productivity over the norm.

Lower profitability: Similarly, McBassi & Company has compiled data which shows that the Engaged Company Stock Index (comprised of 43 companies with high engagement scores), outperformed the S&P 500 by 21.4 percentage points since it’s inception in 2012.

Little or no process improvement: Improvement requires engagement — a willingness to design and conduct experiments, a willingness to take risks to try something new and potentially better. Often times, disengaged employees focus on their personal agendas and see little upside in trying something new to forward the organization’s goals. The associated cost of lost opportunities is difficult to calculate; but it is significant and probably far greater than the direct replacement costs outlined above.

Higher pay: When we say about someone, “They are only in it for the money,” we are observing disengagement. While money is important to nearly everyone, if that is the only motivation, there is no genuine engagement. As the behavioral economist, Dan Ariely, said, “Money is the most expensive way to motivate someone.” Organizations that are unable to create an environment that intrinsically engages their employees must pay them more to keep and motivate them.

Reducing the Cost of Disengaged Workers

Our previous post focused on the cost associated with disengaged workers and the often-unrecognized lost opportunities associated with turnover.

Fortunately, there are proactive steps that can be taken to avoid these costs and the collateral damage to team morale and brand that is a regular side-effect.

Based on research and data shared by the Enterprise Engagement Alliance (EEA) and The Chartered Institute of Personnel and Development, the following five steps can drive employee engagement, and reduce the number of disengaged workers and the associated costs:

  1. Enhanced recruiting and on-boarding — At a recent Engagement World Conference leaders from several organizations explained how they had increased employee engagement and retention beginning at the recruiting stage. The first steps involved the inclusion of the organization’s mission and vision into interviewing conversations, and a more conscious effort to identify and hire people with aligned goals. Adding a mentor program to the on-boarding process helped new hires assimilate faster so they became more productive in less time. Enabling people to achieve higher levels of productivity and success early-on promotes greater engagement levels, and reduces first-year attrition rates. Early churn tends to demoralize everyone, so in addition to reducing re-hiring and re-training costs, the costs associated with negativity within the existing workforce are also reduced.
  2. Consistent performance management and communication — People need to have meaning in their work, and understand how their work aligns with organizational objectives. This point was well made by several speakers in an episode of TED Radio Hour, called The Meaning of Work. If managers communicate a shared purpose or sense of direction, and encourage employees to openly share their perspectives and input, then they can increase employee engagement.
  3. Learning and development — a past post shared the fact that, for the first time in two decades, the percentage of engaged workers in the US rose in 2019. The increase was due to positive changes in how organizations were developing people. In addition, a recent article in Human Resource Executive magazine identified “continuous learning opportunities and personal development” as being two of the four key criteria (scheduling flexibility and social responsibility being the other two) recent graduates value most as they evaluate career options.
  4. Recognition and rewards — Recognizing and rewarding employees is not a new concept, but if the goal is to engage people rather than simply acknowledge milestones (such as length of service), then the approach must be aligned with what is meaningful to each recipient. An EEA article outlines an effective approach, which begins by stepping-back from the traditional monetary rewards.

    “To receive a deeper level of benefit that can come from sincere recognition, look beyond monetary rewards and get to the human connection – reward employees in ways that connect with them
    emotionally and psychologically,” the article suggests.
  5. Flexibility and work/life balance — Employer/employee relationships, expectations, and engagement criteria have evolved significantly over the past decade. In the Human Resource Executive article referenced above, data from a PwC survey of 44,000 workers who had become less-engaged indicated that “71% said their jobs interfered with their personal lives, and 70% said they wanted to be able to work from home.” The current pandemic, which has necessitated higher-levels of working from home, will no doubt add to the number of people wishing to do so more often.

Lost Opportunities: The Hidden Cost of Disengagement

We all know that engaged workers are more productive and loyal. Conversely, disengaged workers are less productive and are among the first to “turnover.” And we all know that turnover can be costly considering it involves hiring, onboarding, training, ramp time to peak productivity, the loss of engagement from others due to high turnover, higher business error rates, and general culture impacts.

But how much does turnover “really” cost?

A 2017 Deloitte study stated the cost of losing an employee can range between 1.5–2.0x the employee’s annual salary. But the costs can be even higher based upon skill level. For example, a paper from the Center for American Progress determined that the average economic cost to a company of turning over a highly skilled job is 213% of the cost of one year’s compensation for that role.

Then there are some of the less tangible considerations, as illustrated by the following example: A young, seemingly fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.”

His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.”

When asked if he was fully-engaged he said probably not but went on to say that he still did a great job. “I still give 100% and consider myself to be a great employee,” he said. Then, after a short pause, he added,” But I don’t give them 110% and there’s a big difference between 100% and 110% — at least for me.”

When asked if he was out looking he responded, “No…, but I’m listening.”

When asked whether he told his boss how he was feeling he said, “Yeah, but….”

How many people in how many places feel like he does? He is bright, educated, skilled, well-liked, and might be an ideal candidate for a senior leadership position…if he stays.

But is he being made to feel like an important part of the team? Does anyone realize that he could be giving more? Is he being engaged?

As stated above, among the many documented advantages of an engaged worker is loyalty. But so too is the discretionary effort that they put forth; going the extra mile; the above-and-beyond attitude… giving 110%! How many innovative ideas might that extra 10% yield? How much more productivity? What impact might it have on customers or coworkers?

And if he doesn’t stay, the simple replacement costs are not the real issue. He is a potential super-star! He is a known-entity… trustworthy, dependable, low-risk.

What are the real (or hidden!) costs associated with disengagement; the costs of not getting 110%… the costs of not only lost workers, but also of
lost opportunities? As we’ve discovered over the years, the biggest waste in most businesses is the lost opportunities…

Driving Team Engagement & Productivity During the Crisis & Beyond

As noted in recent posts, many of us are struggling with the sudden shift to working remotely. Among the challenges involved is lack of clarity with respect to expectations and, in some cases, organizational mission.

In fact, reestablishing expectations or mission, and providing the tools necessary to get the job done are two of today’s most important leadership tasks according to a recent Gallup article.

Silver Lining?
Certainly, these realities pose a challenge for leaders at all levels. But might there also be a silver lining?

Consider that over the past decade the majority of workforce engagement efforts have failed to yield tangible results and have failed the sustainability test. Current research shows that because these efforts tended to be ad-hoc, lacking defined, measurable objectives, they were prone to failure.

However, a more focused approach of improving both the work and the workplace in a measurable way can result in high-levels of productivity, profitability and engagement; and now might be the ideal time to launch such an effort, as remote team members struggle to maintain both productivity and engagement levels.

Even better, this more focused approach to productivity/improvement and engagement can (and should!) continue when we all “return to work,” thus transforming yesterday’s workplace into a more highly engaged and productive one.

To accomplish this, organizational leaders should focus on two key objectives:

  • Providing productivity and continuous improvement tools and programs as catalysts to engagement
  • A strong focus on measurement and recognition

If this approach resonates, you might like to download a free white paper entitled, “Engagement Around the Work” from our website.

Poll Says More Workers are Engaged & Why

A Formula for Engaging People

One of our white papers shares the concept of CPI2, which refers to the combination of Continuous Process Improvement (CPI) and Continuous People Improvement (CPI) as an effective way of boosting both employee engagement and productivity. It is based on the premise that productivity is the key driver of employee engagement (or the employee experience), as people like to feel successful… they like to be part of a winning and productive team… and they like to feel their work is important.

More recently, the concept of CPI2 has been indirectly referenced in an article published by Gallup, which reveals that employee engagement levels reached an all-time high in 2019.

According to their research, the percentage of “engaged” workers in the U.S. reached 35% this past year. While 35% might strike you as a low number, it is actually a new high since Gallup began tracking the metric in 2000.

This increase in engagement levels is good news for all of us…

As you may know, engaged workers are highly involved in their work. They go about their work enthusiastically, they treat customers better, they make a stronger discretionary effort compared to their dis-engaged co-workers, and they are committed to both their work and workplace.

So clearly, the increase in engaged workers is good for employers.

But this increase is also good news for employees and other stakeholders! It’s good news because it shows that the more formalized plans for engaging people are working; it’s good news because it means more people are finding greater levels of fulfillment in their work. As Dr. Deming said, “Management’s overall aim should be to create a system in which everybody may take joy in his work.”

So, it’s also fair to say that this increase in engagement levels is good news because it bears witness to the fact that the process of workforce engagement can yield win-win outcomes for both employers and employees.

Why the Increase?
If you’re wondering why the number of engaged workers has risen, Gallup has a straightforward answer.

“There are several possible explanations for the changes in engagement over the past decade,” the article states. “…and Gallup has reviewed many of these previously, from changes in the economy to slight improvements in some employee benefits. But these factors are not the primary drivers of improved engagement.

“Gallup research indicates that changes in employee engagement are best attributed to changes in how organizations develop employees.“

The article also shares four themes that Gallup’s research identified in organizations with high-development cultures:

  • High-development cultures are CEO- and board-initiated.
  • High-development cultures educate managers on new ways of managing — moving from a culture of “boss” to “coach.”
  • High-development cultures practice company-wide communication.
  • High-development cultures hold managers accountable.

Room for Improvement & CPI2
However, the article also goes on to acknowledge that a 35% engagement percentage is still low.

“The percentage of engaged employees in the U.S. is still far too low,” the article states. “There is plenty of room for improvement… What would the world of work look like if organizations could double the percentage of engaged workers? This isn’t a pie-in-the-sky question — all evidence suggests it is possible. Organizations have been successful, over recent decades, in maximizing process efficiency through Six Sigma and advances in technology and automation — doubling engagement would mean U.S. organizations have matched process efficiency with people efficiency.”

In other words, CPI2.

Read the full article…

ISO 10018: Quality People Management

Our previous post referenced the fact that a formalized approach to enterprise engagement yields a positive result for all stakeholders, including both employees and employers.

For more perspective about what constitutes a “formalized” approach, you might consult ISO 10018 guidelines on people involvement and competency.

These guidelines were created by the ISO (International Organization for Standardization) Technical Committee ISO/TC 176, Quality management and quality assurance, Subcommittee SC 3, Supporting technologies.

They are based on the premise that “the overall performance of a quality management system and its processes ultimately depends on the involvement of competent people and whether they are properly introduced and integrated into the organization,” according to a summary of the standards published by ISO.

“The involvement of people is important in order for an organization’s quality management system to achieve outcomes which are consistent and aligned with their strategies and values. It is critical to identify, develop and evaluate the knowledge, skills, behavior and work environment required for the effective involvement of people with the necessary competence.”

This international standard provides guidelines for human factors which influence people involvement and competence, and creates value that helps to achieve the organization’s objectives. While the standard was created specifically for the application of quality management, its creators suggest that it has application for any management system.

Key Principles of Quality People Management
The underlying distinguishing factor of ISO 10018 is the attempt to bring a process approach to Quality People Management. The standards are based on the following Quality Management Principles created by ISO Technical Committee 176:

  • Customer focus to align activities and priorities in service to the consumers of an organization’s services or products.
  • Leadership that insures people feel inspired, have the information and knowledge needed to do their jobs and feel part of a community so that they have a sustainable passion for success.
  • Involvement of people so that everyone acts as the eyes and ears of the organization.
  • A process approach to provide a systematic, as opposed to an ad hoc, approach to achieving goals.
  • A systematic approach to management that ensures alignment of all key tools of engagement.
  • Continuous improvement: a culture committed to innovation.
  • A factual approach to decision-making rather than influenced by political or factional biases.
  • Mutually beneficial supplier relationships.

Ream more from the Enterprise Engagement Alliance…

Engagement 2020: Win/Win

A Winning Approach for Employees & Employers

The emerging field of employee or workforce engagement has captured the attention of most “C Suites” over the past year or two; and as more and more organizations are taking a more formalized approach to engaging employees, the correlation between engagement and Continuous Improvement (CI) has also emerged.

Consider that engagement is simply a framework for achieving goals through people in a measurable way. These “goals” can involve anything, and might include reducing team turnover, enhancing safety, or improving specific work processes.

But what many of us might not realize is the fact that today’s “engagement” plans are designed to benefit all stakeholders, including employees and employers.

Organizations that have embraced this approach have found it is not only possible to achieve almost any goal that involves people, but also, to the surprise of many, to realize a return-on-investment in the process. In other words, engagement can be a profit center rather than a cost center and the ROI can take on various forms.

For example, according to an Employee Engagement Benchmark Study by Temkin Group, highly engaged employees try harder and tend to drive business results. They are twice as likely to work after their shift ends, twice as likely to do something good for the company that is unexpected of them, and three times as likely to make recommendations for company improvements.

But these same employees can also be participants in an ongoing effort to improve their workplace. They can have a say, and they can have a hand in impacting the quality of day-to-day work life by improving the way their work is done. In these cases, which we call “engagement around the work,” many feel more empowered and experience greater levels of job satisfaction as well.

So, as noted above, engagement yields benefits for all stakeholders, employees and employers. Or, as the saying goes, “a rising tide lifts all boats.”

It is important to recognize, however, that engaging people to achieve results requires top-management support and requires more than a casual or ad-hoc effort. Far too many organizations have learned this lesson the hard way, only to find half-hearted efforts don’t work. This reality is evidenced by the fact that only thirty percent of the U.S. workforce is engaged.

Here is a more comprehensive and structured approach to engaging a workforce based on extensive research completed by the Enterprise Engagement Alliance – you might also note how well it aligns with tried-and-true CI methodology:

  • Develop realistic, achievable, and measurable goals and objectives.
  • Effectively assess the people and the playing field to identify opportunities and obstacles to success.
  • Create a formal Engagement business plan outlining the desired outcomes, behaviors that lead to outcomes, key program components, roles and responsibilities, timeline, and return on investment, etc.
  • Implement the appropriate integrated communication plan, including an Engagement web portal for the program when appropriate.
  • Make sure people have the knowledge or skills needed to succeed.
  • Foster an atmosphere of collaboration, innovation, and fun.
  • Reward and recognize both progress and achievement so that people feel supported in their efforts.
  • Measure outcomes and returns.
  • Reinvest and continue…

Your Personal Or Organizational Engagement Level?

How Do You Compare?

If you’d like to assess your personal engagement level, or see how your organization or client organization compares to others, the Enterprise Engagement Alliance (EEA) offers several no-cost benchmark tools.

Accessible through their website, the EEA provides three free and confidential tools to help individuals and organizations benchmark various aspects of engagement. There are currently three different ways in which you can benchmark engagement levels:

  • Gauge your personal engagement – how your personal level of engagement compares with others
  • Gauge your company’s or client’s general level of engagement – how it compares in terms of the same criteria used to create the Engaged Company Stock Index
  • Benchmark your company’s or client’s engagement practices – how they compare with best practices and other survey respondents in terms of employee, customer, distributor, and vendor engagement practices

The CEO & Enterprise Engagement

Leadership

Since our inception we have stressed the fact that an organization’s leadership must champion a Continuous Improvement (CI) effort if it is to become cultural and if it is to succeed in a sustainable fashion.

Along similar lines, the Enterprise Engagement Alliance has shared data as well as experiences indicating the same holds true for engaging employees and customers; and just like a culture of CI, a culture of engagement generates a measurable return on investment.

“A CEO-led strategic and systematic approach to human capital management can enhance performance and create a better experience for all,” an article on the Enterprise Engagement Media website states.

“Without the leadership of the CEO, it is impossible for an organization to fully engage all its stakeholders in its brand, mission and goals—customers, employees, distribution partners, vendors, communities, shareholders, etc.—or to achieve measurable ROI.”

The Enterprise Engagement Alliance was the first to give a name to this strategic and systematic process to connect and align all stakeholders toward a common brand, mission, values, and goals, naming it “Enterprise Engagement.”

The Pathway to Engagement

The path leading to a culture of engagement is linked with productivity, performance and job satisfaction. It follows a clear objective of engaging people around the one thing they all have in common—and the one thing that can bring about increased profitability and a sustainable competitive edge—the work.

As we all know, traditional employee engagement efforts have primarily failed to yield tangible results. They have also failed the sustainability test. As is the case with any improvement or change initiative, an ad-hoc approach involving little or no planning or structure, and lacking defined, measurable objectives, is prone to failure. This approach might be called “engagement for engagement’s sake.”

In contrast, a more focused approach of improving both the work and the workplace in a measurable way can result in high-levels of productivity, profitability and engagement!

As explained by Robin Gee, Coca-Cola’s Director of Employee Engagement, “We engage employees in aggressive efforts to eliminate waste and reinvest those savings in ways that are visible and meaningful to the employees.”

This perspective differs from traditional attempts at employee engagement in two critically-important ways:

  • A strong focus on productivity and continuous improvement as catalysts to engagement
  • A strong focus on measurement and return on investment

Of course this perspective is not necessarily new. For example, in 2012 ISO 10018 was introduced, which provides guidance on engaging people in an organization’s quality management system, and on enhancing their involvement and competence within it. The standard is applicable to any organization, regardless of size, type, or activity.

You might also note that ISO 10018 standards provide considerable leeway on how an organization specifically goes about its attainment. The emphasis placed on each requirement depends on an organization’s specific brand, culture, people, situation and goals. If you’d like to determine how close your organization is to achieving ISO 10018 certification, Engagement Strategies Media has created a chart that outlines the pathway. You can access the chart here.