At a Gallup presentation the audience was asked to imagine their business was a ten-person crew boat.
The speaker then went on to share data (at the time) indicating approximately 30% of the US workforce fell into the “engaged” category, which meant that they were invested in their work and workplace, that they made a strong discretionary effort, and worked at a very productive level.
If these people were on your crew boat, they would be diligently ‘manning their oars.’
We were then informed that just over half of the US workforce fell into the disengaged category. These people were not highly-motivated and, though they made a fair effort each day, they were more likely to do only what had to be done – and sometimes less!
If these people were on your crew boat, they would occasionally dip their oars in the water but mostly sit idle looking at the scenery.
The remainder of the nation’s workforce, we were told, fell into the actively disengaged category. These people tend to undermine the work, spread rumors, call out sick at higher rates and do only the bare minimum.
If they were on your crew boat, they would most likely be trying to sink it!
Makes a strong case for implementing a formalized engagement plan, wouldn’t you say?
When engaged in continuous improvement (CI) it’s important to frequently assess our approach, starting with the foundation.
When it comes to engaging employees, the process begins with onboarding, which is the process for welcoming new employees. Among other things, onboarding is an opportunity to make new hires feel confident in their decision to accept the position as well as in their new role and team.
Despite the fact that onboarding sets the tone for the rest of your new employee’s experience at your company, and despite the fact that effective onboarding has a strong impact on retention and productivity levels, data shared by SHRM, Indeed, and others indicates that over 80% of businesses don’t have a very good onboarding plan.
If you’d like to improve your employee onboarding process you might start by considering the following best practices:
Start communicating before your new hire’s first day
Prepare well in advance
Set up the employee’s workspace before they arrive
Send out a new employee announcement including name, role, etc. If done by email, cc them
Pair new employees with a peer mentor / “buddy”
Ask new employees for their feedback early-on in the process and several months into the process
In a recent presentation, Gallup shared some powerful data on why an organization’s managers are so important.
“Managers are the heart of your organization,” they said. “Managers communicate and uphold the standards of your culture and your brand. They can make or break any change initiative. Nearly every problem and achievement in your organization can be tied back to the quality of your managers.”
During the presentation, Workplace Expert Patrick Mieritz referenced Gallup survey results indicating managers account for 70% of the variance in team engagement!
If you’re wondering why this statistic is so significant, consider their findings on how highly engaged business units and teams impact typical “negative” outcomes:
81% decrease in absenteeism
43% decrease in turnover within low turnover organizations
18% decrease in turnover within high turnover organizations
28% decrease in shrinkage (theft)
64% decrease in safety incidents (accidents)
41% decrease in quality defects
Their research also shows that highly engaged teams have a significant impact on “positive” outcomes as well:
10% increase in customer loyalty
18% increase in sales productivity
14% increase in overall productivity
23% increase in profitability
66% increase in well-being (thriving)
13% increase in organizational citizenship (participation)
Managerial Best Practices If you’d like to increase the effectiveness of your organization’s managers or your personal managerial effort, a good first step is to identify or confirm the things that are important to your workforce; and beware, employee expectations have shifted since the onset of the pandemic.
As motivation expert Daniel Pink explained, “People really want three things: autonomy, mastery, and purpose.”
Or as famed statistician W. Edwards Deming often said, and a fact that still rings true today, “People are entitled to joy in work.”
So, what’s to be done?
We all know that, at the organizational or senior management level, offering more flexible work arrangements (when possible), reviewing pay scales, and improving on-boarding/team development programs are steps in the right direction.
But, if you’re wondering about actionable ways in which mid- or front-line managers can increase engagement, productivity, and retention levels, you might also consider the following best practices:
Set clear expectations. Approximately half of all US employees say they know what is expected from them at work. To improve on this, SHRM suggests managers should emphasize objectives, set expectations early, make goals measurable, and give meaningful feedback (only 26% of US workers say the feedback they receive is helpful). Gallup adds a note to this by suggesting managers give meaningful and frequent feedback, indicating that workers who receive weekly meaningful feedback from their managers are 2.7 times more likely to be engaged in their work.
Create a culture of clear accountability. This does not mean taking a “do it or else” stance, but rather a motivational approach that includes open communication, recognition, and awareness.
Motivate each employee individually. There is no one-size-fits-all approach that works.
Coach and develop people based on their strengths. Gallup says that 66% of employees who strongly agree that their manager focuses on their strengths or positive characteristics are engaged. Focusing on strengths has also proved an effective way to ensure people are placed in the right roles; and providing ongoing development to team members has proved to have a significant impact on increasing engagement levels while reducing turnover.
Overcommunicate! Leaders who maintain open and frequent communication, who show an interest in their teams, who share stories of success and vision, and who remind people of the mission tend to foster higher levels of engagement.
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.
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…
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.”
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.
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
Our previous post identified the role that trust plays in an organization’s success, and referenced it as “the soft concept producing results that are hard to beat.”
While trust may seem too soft a concept to produce a competitive edge, the facts indicate otherwise.
In fact, a high level of trust is essential to creating an agile, highly competitive organization and here are four reasons why.
1.)No Trust — No Speed In a world where new challenges arise very quickly, it is the failure to act, failure to improve, and failure to innovate that poses the biggest risk to a company — not the risk of making a mistake. However, to an individual in a low-trust environment, by far the biggest risk is making a mistake. For these individuals, trying something new is much riskier than doing what’s been always been done. Innovation or even simple improvement is not going to happen. The whole organization slows down.
Covey, in The Speed of Trust, puts it this way: “When trust is low … it places a hidden ‘tax’ on every communication, every interaction, every strategy, every decision.” People don’t fully hear what their leaders are saying, because they factor in guesses about the leader’s intentions. They wonder how transparent their leader is being. Employees don’t buy-in to decisions that they don’t trust.
Aron Ain, author of WorkInspired, How to Build an Organization Where Everyone Loves to Work, and CEO of Kronos (a leading global provider of workforce management cloud solutions), points out that lack of trust places “a huge overhead burden on a relationship.” He insists that when you employ someone, you should go ahead and trust them! Will you get burned on occasion when trusting people?
“Absolutely!” Ain says, “But almost always my trust in team members has proven well-founded. And the benefits are numerous.”
By building a culture where employees know they are trusted and where they trust their managers and teammates, Kronos has created an organization where it is safe for people to be creative and to aim for the best possible outcomes, continuously getting better and better.
2.) No Trust — No “Exposing Reality” Exposing reality means trying very hard to look at things the way they really are, rather than the way we wish they were. As Ain points out, “the faster you see things as they really are, the faster you can get to work on improving them.”
But in a low-trust environment, people are especially motivated to gloss over uncomfortable truths and to declare victory and move on rather than checking to see if they did or didn’t get the results they expected. Trust enables us to admit what we don’t know, recognize and recover quickly from mistakes, and to put uncomfortable information, questions, and contrary opinions out in the open, where the team can work through them with honesty and passion to arrive together at the best strategies and decisions.
3.) No Trust — Poor Results In a low-trust environment, employees hold back information or ideas that seem risky to share, so leaders make decisions based on incomplete information and without knowing all the potential consequences. And when employees believe their managers are making decisions without all the relevant input and information, they often question or even slow-walk the decisions.
Covey cites polls showing that only 45% of employees have trust and confidence in senior management. Lencioni, in The Five Dysfunctions of a Team, places lack of trust at the foundation of his pyramid of dysfunctions culminating in poor results. Without trust among a team, people keep their cards close to their chests. They are afraid to admit the limits of what they know, afraid to admit any vulnerabilities. Because they don’t trust one another, they fear conflict and withhold uncomfortable information and dissenting views. Without complete information, these teams make poor decisions, and the decisions they do make are poorly executed because they do not arrive at a shared commitment to the decision unless they have aired and resolved dissenting views. Thus, a lack of trust leads to both flawed strategies and poor execution.
4,) Trust Inspires and Engages Covey observes that “trust is one of the most powerful forms of motivation and inspiration. People want to be trusted. They respond to trust. They thrive on trust.”
This is exactly what Ain sees happening at Kronos. “Because we place so much faith in employees,” he explains in WorkInspired, “they return the favor, placing a remarkable degree of trust in us. Their trust in turn leads to far better performance — more innovation, quicker recovery from mistakes, more energy and enthusiasm at work.”
The next step, of course, is identifying the best way to build a “culture of trust,” which will be the subject of our next post.
You might call it a “secret weapon” but, to be honest, it is the exact opposite. Because unlike a weapon, it is constructive rather than destructive; the only harm it could do a competitor is to leave them behind.
And it is anything but secret!
In his recent book, WorkInspired, How to Build an Organization Where Everyone Loves to Work, Aron Ain openly shares the pivotal role it has played in Kronos’s amazing growth story.
This “secret weapon” is trust — the soft concept producing results that are hard to beat.
The role that trust plays in an organization’s success has been written about before by keen observers of human and organizational dynamics.
Patrick Lencioni in The Five Disfunctions of a Team identifies the lack of trust among a management team as the root cause of most poor performance.
Stephen M. R. Covey in The Speed of Trust: The One Thing That Changes Everything passionately echoes this view, citing research indicating high-trust organizations out-perform their low-trust competitors by 300%, because a lack of trust increases costs while simultaneously reducing an organization’s speed and agility.
What’s different about Ain, CEO of Kronos, a leading global provider of workforce management cloud solutions, is that he can tell us how trust is working in action today and about the tools and methods in place to support the practice and enhance the effectiveness of trust.
At Kronos, everyone is expected to give trust both within and outside their functional areas and to practice behaviors that earn the trust of their employees, teammates, and managers. According to Ain, the culture of trust contributes to much more than high engagement and retention, as important as those are, but to amazing business results.
And the results Kronos has achieved are great! Revenue has tripled; Kronos has surpassed 35,000 customers worldwide, innovations are rolling out faster than ever, and employee engagement scores are through the roof. Kronos once again occupies the #1 spot in the Boston Globe’s Top Places to Work list in Massachusetts. It received an award from Fortune Magazine for Best Workplace for Millennials – 2018. It is on both Glassdoor’s and Fortune Magazine’s lists of top 100 places to work and has received numerous other awards for workplace engagement.
Based on a recent newsletter by our associate Sheila Julien, our next post will share four specific reasons why “trust” works and why it is essential to creating an agile, highly competitive organization.
Challenges and best practices associated with continuous improvement