Creating Corporate Culture II: Employee Engagement

To win customers — and a bigger share of the marketplace — companies must first win the hearts and minds of their employees.

                                                                                                                                                ~ Gallup State of the American Workplace, June 2013

People want to feel supported, have a sense of belonging, and understand the contribution they can make toward organizational goals.  This, in a nutshell, is the definition of employee engagement.

Engaged workers -- those who approach their work with energy, dedication, and focus -- are open to new information, more productive, and more willing to take the initiative in order to stay engaged.  More to the point, engaged workers are the cornerstones upon which highly profitable businesses are built.

Why are engaged employees important to a business owners? 
In simplest terms, PROFIT:  What’s in engagement for you, the business owner, is this:  “Organizations with an average of 9.3 engaged employees for every actively disengaged employee experienced 147% higher Earnings Per Share (EPS) compared with their competition.”  Engaged employees equals hirer productivity and profit.

Yet recently published report from the Gallup organization concludes that of the approximately 100 million people in America who hold full-time jobs,

• The Engaged Employee – 30% of all employees are engaged and inspired at work.  Engaged employees are the best colleagues, they cooperate, and are involved in, enthusiastic about, and committed to their work. They know the scope of their jobs and look for new and better ways to achieve outcomes, and, are the only employees who create new customers.
• The Not-engaged Employee – 50% of all American workers are not engaged. They’re just kind of present, but not inspired by their work or their managers.  They are not hostile or disruptive. They show up and kill time with little or no concern about customers, productivity, profitability, waste, safety, mission and purpose of the teams, or developing customers. They are thinking about lunch or their next break. They are essentially “checked out.” Surprisingly, these employees may be one of your top managers who “smile in your face” yet undercut your best efforts.
• The Disengaged Employee – According to Gallup, 20% of all employees are actively disengaged to the point of consciously working to sabotage your plans and programs.  To quote the Gallup report, “Actively disengaged employees are more or less out to damage their company. They monopolize managers’ time; have more on-the-job accidents; account for more quality defects; contribute to “shrinkage,” (i.e., theft); are sicker; miss more days; and quit at a higher rate than do engaged employees. Whatever the engaged do — such as solving problems, innovating, and creating new customers, employees in this category try to undo.

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GALLUP’S Q12® Twelve Questions to Measure Employee Engagement

Concerning employees’ primary needs:

01 I know what is expected of me at work.

02 I have the materials and equipment I need to do my work right.

Concerning an employee's contributions how they feel others view and value their effort:

03 At work, I have the opportunity to do what I do best every day.

04 In the last seven days, I have received recognition or praise for doing good work.

05 My supervisor, or someone at work, seems to care about me as a person.

06 There is someone at work who encourages my development.

Concerning employees feelings of “Do I belong?”

07 At work, my opinions seem to count.

08 The mission or purpose of my company makes me feel my job is important.

09 My associates or fellow employees are committed to doing quality work.

10 I have a best friend at work.

Concerning employees desire to make improvements, learn, grow, innovate, and apply their new ideas.

11 In the last six months, someone at work has talked to me about my progress.

12 This last year, I have had opportunities at work to learn and grow.

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As business owners, we all want engaged employees and fear the consequences of disengaged employees who actively work against us.  The good news is engaged employees are to a great degree created by conditions in the workplace, conditions that you the owner control. 

According to research out of Erasmus University Rotterdam in the Netherlands, there are two sets of resources critical to building employee engagement:

1. The more your employees feel they receive social support, that you listen to and accept their feedback, and give your employees opportunities for autonomy, variety, and growth, the more engaged they will be.
2. Your employees' own personal resources -- such as self-esteem and optimism.  Workers with abundant personal resources approach their jobs with more enthusiasm and joy, tend to be in better health, and try to find ways to make their responsibilities "fit" their talents and interests and to increase challenge.

Interestingly, the Erasmus research demonstrates that engagement and high-quality performance is greatest when the demands of the job are highest, even in what we think of as low-level jobs, such as those at a fast-food restaurant. 

"The people who report high stress are the ones most invested in their jobs," says Dr. Carolyn Dewa. "Employers should be very concerned with keeping this population healthy. From a business perspective, it is in a company's best interest to support these workers."

Manager beware: engaged employees willing to go above and beyond risk burn-out, so managers are advised to ensure that their best performers don’t overdo it, that they get away from the job and have the opportunity to recharge.  Make even the most motivated employee feel you’re taking advantage of them, and they will start looking for a job that gives them a better work-life balance.

Other factors that create engaged employees are:

1. Provide clear, preferably written guidelines and expectations.  Not having clear guidelines and expectations is shown to cause employees to become disengaged.
2. Employees given greater variety and independence in their jobs feel both less stressed and more satisfied, according to research by Stephen Wood, University of Leicester Professor of Management. "The way jobs are designed has a huge impact on employees' sense of happiness at work. Our study implies that priority should be given to initiatives that enrich jobs, enhance consultation (between employer and employee), and improve information sharing."
3. “Giving a 1 percent raise boosts employee job performance by roughly 2 percent, but offering that same money in the form of a bonus that is strongly linked to a job well done improves job performance by almost 20 percent,” says Michael Sturman, associate professor at Cornell's School of Hotel Administration.  His research indicates that paying above the market also produces higher employee performance.

Engaged, Yes.  But Committed to ???
A proviso:  The notion that highly engaged workers work tirelessly for the good of your company is a bit misleading, according to Clemson University psychology professor Thomas Britt.  Britt’s research found that an engaged employee isn’t necessarily committed to your organization, but may be committed to finding the next job or the opportunity for career advancement for themselves.

“If some engaged employees have the opportunity to change jobs they will,” he said. “Managers who fail to position employees to be effective in their roles and provide support may lose their most talented and energetic people.  The ones who stay behind may well be the ones who just don’t care,” said Britt.

Again, this stresses the importance of working with each employee as an individual, and not seeing each as an easily replaced piece in a puzzle.

Employee Engagement in Small Business
Now the good news for entrepreneurs or owners of small businesses, Gallup found the highest employee engagement level by far (42%) in companies with fewer than 10 people. Even in a small business, it isn’t that easy to engage the different people who work there.  But the best size of business in which to create engagement is two to ten employees, when you, the owner directly supervise the people who work for you.

As soon as you hire your first manager or supervisor, the dynamic of your business changes, with you now relying these employees to accurately and competently communicate your vision and goals.  This creates a situation where you must either promote or hire someone with the talent and skills to be an effective manager, and, you must actively work to create the conditions needed for these employees to be engaged with the expectation that they will keep the employees they supervise engaged.

The Role of Ownership in Creating a Culture of Engagement
“Many companies do not recognize the importance of employee engagement to performance," states Jamie A. Gruman and Alan M. Saks in their paper entitled “Performance management and employee engagement.” 

According to current research, there is no single best way to engage employees, to capture their best efforts and create a long-term team player that you can count on.  As Gallup points out, “great managers recognize that behind all are people with different talents, skills, and experiences whom they need to manage individually.”  This goes beyond being aware of diversity to being in tune with the personality of each employee, having an understanding of their interests, concerns and backgrounds, being aware of their personal lives (without getting involved), and being open to their participation in your business in the hopes that they will take “ownership” of the company’s success. 

In simplest terms, teamwork among an organization's top management makes employees happier and more productive, with positive benefits to the organization.

The Role of Managers in Creating a Culture of Engagement

The single biggest decision you make in your job — bigger than all of the rest — is who you name manager. When you name the wrong person manager, nothing fixes that bad decision. Not compensation, not benefits — nothing.

                                                                                                                                                            ~ Jim Clifton, Chairman and CEO Gallup, Inc.

In the Gallup research, 61% employees who stated that they feel their supervisor focuses on their strengths, are actively engaged in their jobs, compared to just 30% for American workers as a whole.  In short, focusing on the positive talents, knowledge, and skills of your employees creates a culture that fosters high performance.

The message here is that who you promote or hire as manager is critical to your company’s continued growth and success.  This is especially true of businesses that are transitioning from the owner directly supervising all employees to a business in which a layer of managers and supervisors exist between you the owner and your employees.

Yet in all too many situations, managers are promoted from within as a reward for longevity on the job, which potentially results in the promotion of a disengaged employee who simply put in their time.  Being elevated to manager or supervisor status should be in recognition of good management skills, not as a reward for simply surviving.

Employers Often More Interested in Hiring Potential Friends Than the Best Candidates
“Employers are often more focused on hiring someone they would like to hang out with than they are on finding the person who can best do the job,” suggests a study by Lauren A. Rivera, an assistant professor of management and organizations and sociology at Northwestern University.

"Of course, employers are looking for people who have the baseline of skills to effectively do the job," said study author. "But, beyond that, employers really want people who they will bond with, who they will feel good around, who will be their friend and maybe even their romantic partner. As a result, employers don't necessarily hire the most skilled candidates."

What Makes for a Good Manager?
“Good managers have a talent for supporting, positioning, empowering, and engaging their staff.” says Gruman and Saks.  “A good manager has an immediate effect on employees’ engagement. Good managers make the changes that each employee needs to experience meaningfulness, safety and feel available to become fully engaged in their work. Some employees might need more autonomy in their work, more challenge, more input, or perhaps more support or training."

"Engagement helps predict job performance," continued Gruman and Saks. "Employees who feel engaged in their tasks do a better job, are less likely to make mistakes, and bring more energy, dedication and vigor into their performance.”  Their report documents lower turnover and less absenteeism with engaged employees. According to Gruman and Saks, the three elements of an engaging job are:

•  Psychological meaningfulness -- feeling that my role is worthwhile and valuable.
• Psychological safety – I feel safe to commit to a role without fear of damage to self-image, status or my career.
• Psychological availability -- associated with the physical, emotional and psychological resources that I bring to this job.

Good Managers Fake It
Interestingly, research also shows that effective managers are aware of their emotions, and, to be blunt, “Fake it.”

"We have known for some time that the emotional climate in the workplace is a key factor in employee wellbeing and performance.  Good managers recognize the need to fake their emotions at work, especially when interacting with staff,” says psychologist Chiara Amati from Edinburgh Napier University.   “To ensure employees perform, managers need to manufacture positive and encouraging emotions and override any unhelpful, private thoughts. Faking it seems just a part of good people management," reported Chiara.

New Hires are Your Best Opportunity to Create an Engaged Employee
On the other hand, research reveals that workers are typically more engaged in their first six months on the job than they will be at any other stage in their employment with that company. Although engagement peaks during this early period, only half (52%) of employees are engaged at this point, suggesting that there may be room for improvement in most companies’ orientation and training processes. Following the initial six months, employee engagement dips significantly to 44% for workers under the 10-year mark. From there, engagement tends to remain mostly flat for the duration of a typical employee’s career.

With people often changing jobs and careers, organizations need to know how to help integrate and engage newcomers in order to retain them. A University of Guelph study shows that new employees adjust better to their workplace with structured processes, such as orientation training and mentorship programs.

"Simply throwing newcomers into a job and letting them fend for themselves results in their being socialized by default rather than design," said Jamie Gruman, an organizational behavior professor in the Department of Business and the School of Hospitality and Tourism Management.

For more information about Employee Engagement, order your copy of:

Manager's Guide to Employee Engagement
by Scott Carbonara

Story Sources:

1. STATE OF THE AMERICAN WORKPLACE, EMPLOYEEENGAGEMENT INSIGHTS FOR U.S. BUSINESS LEADERS. Copyright, Gallup, Inc., 2013. All rights reserved. 
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