Employee Engagement – State of the Notion – Roundtable Report
08 April 2014 London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.
Lynda Aldridge, Director for Engagement – Serco
Fiona Anderson, Head of HR, Europe – Oaktree Capital Management UK LLP
Conrad Bester, Global HR Director – Merisol
Linda Burton, Head of OD and HR Policy – NHS Property Services Ltd
Steve Davies, Head of HR – Lambeth Living Ltd
Mark Jones, Director of Learning & Development – Atkins plc
Graham McDonnell, HR Director – Be At One
Stuart McPherson, Learning & Development Manager – Interserve
Sally Smith, Director of People – Sue Ryder
Graeme Cohen, Director – VaLUENTiS
Nicholas Higgins, Chief Executive Officer – VaLUENTiS
A survey is purely a measurement device. It tells you what is going on. It never tells you why. And if you’re not bolting that bit on, it’s just a survey.
As the old adage neatly encapsulates: “you can’t buy happiness”, and the return on investment really is the bottom line for employers, often in the pursuit of perceived, as opposed to actual, benefits to the business, along with improved performance, retention of talent and general contentment in the workforce. But what exactly is being measured and how is success or failure benchmarked?
What is your definition of employee engagement, in relation to your own organisations and how do you carry out engagement surveys?
Mark Jones: The amount of discretionary effort that our people bring has a direct impact on our commercial success as an organisation. Engaged employees have a desire and commitment to doing the best job they can, so for us this drives the degree of discretionary effort that we get from our people. Engagement is made up of a number of elements, but for me it all comes back to the output which is the discretionary effort that engagement generates.
Stuart McPherson: We do a Say, Stay, Strive survey bi-annually and although we try to increase participation, you tend to get the same amount of people, same numbers and percentage filling that in every time, which is an area we are working on. The other survey that we do is a social capital and productivity survey, which is part of the change management model that we deliver. We deploy the survey at the early stages of a change or transformation project and then at intervals throughout the initiative, you’re essentially managing and monitoring where they are through the change curve.
Lynda Aldridge: Serco has 35,000 people in the UK and over 100,000 people globally, and the challenges are the same internationally, according to our surveys. We put a lot of work into the content of the survey every year with focus groups, to try and redefine what that really means, and we too base our surveys on Say, Stay, Strive, from which the other questions stem from.
Linda Burton: We have 161 different organisations coming in to one, with 161 different ways of doing things. This means that you have different levels of engagement to start with, plus those staff didn’t choose to join our company. The first thing really is to get things aligned and get people accepting that they’re working for one company and moving in one direction. Our approach has been to undertake a staff engagement survey to gain quantitative data and then I will go out and conduct regional focus groups to gain qualitative information. As we are just across England, this is possible.
How useful are engagement surveys as a weather check, a contextual and timely gauge of the business as a whole?
Mark Jones: Employee surveys are not conducted in isolation from what’s going on in the outside world. We’ve certainly seen, as markets have changed and as we have come out of recession, that employee engagement scores in parts of our business have risen because people are feeling better about job security and career prospects.
Conrad Bester: We have HR support on the ground in different countries and yes, the way we look at employee engagement is quite contextual, and that means there has to be a reason to actively go out and do some intervention, in order to align employees to an organisational change occurring.
Lynda Aldridge: We’ve seen contracts where we might have had a specific decline in engagement, and when you look at when the survey took place and the context, you can see there may be mitigating circumstances that could cause a decline in engagement, such as a re-structuring or a cost cutting exercise. But it’s important not to look for excuses.
Sally Smith: Sue Ryder has salaried staff, but is reliant to an extent on volunteers to deliver the business, and good engagement for both. We have found what makes the biggest difference is authenticity, and this means that our engagement focused activity has to be local and valid for that group of staff. Our people helped us develop those values and behaviours and have helped us articulate and cascade them through the organisation both in performance assessment and recruitment.
Steve Davies: Engagement is about the HR strategy, the organisation’s goals, values, culture and systems; leadership etc. So I look at it from an HR strategy angle, looking to align employee engagement and the HR strategy as one. Staff surveys start to measure if your staff buy into the company and the value system. Do they feel that they are willing to recommend the organisation and provide discretionary effort? But you also need other measures, such as staff absenteeism and attrition rates, to understand employee contribution.
That brings the question, is engagement and how we define it, very differently to say 20-30 years ago, and is a more holistic approach the future of measuring and managing engagement?
Fiona Anderson: Rather than a measurement tool, we consider part of engagement strategy as how we recruit and manage performance. We recruit highly engaged individuals into our investment teams, so there is not necessarily the need to talk in terms of engagement with the business and I don’t believe in pushing an HR agenda for the sake of it.
Sally Smith: I would agree, a holistic approach to engagement provides greater impact. In the past, HR teams would concentrate on one or two improvements a year to improve engagement, but we take a more proactive approach and work on areas to improve engagement across the whole of the People agenda, and in fact growing strong engagement is central to the overall strategy. We never focus on just one or two areas with particularly low scores, but across the piece.
Nicholas Higgins: We constructed a definition that could be used practically in organisations, fusing together many concepts and empirical research. Why do we see definition as important? Well, first of all, if you’re going to do anything in employee engagement terms, you need to communicate it effectively for managers and employees to understand. Secondly, in terms of measurement, you have a ‘working definition’, it’s very difficult to measure and use accordingly. Increasingly, we’re concerned that organisations have not really measured engagement per se, which was strongly highlighted in the report research. Thirdly, definition acts as a reference point/baseline – as organisations evolve and change, it provides a marker to adapt, rebase, or revisit employee engagement. Our generic definition included the terms ‘alignment’ and ‘commitment’ with ‘most productive’. It also provided organisations with the opportunity to customise these terms, depending on how deep and/or how broad each organisation wanted to go. Both ‘alignment’ and ‘commitment’ here have multiple aspects. For example, in commitment terms there is the individual and immediate team, the individual and the immediate organisation and the individual and the wider umbrella organisation/institution, the ‘duality’ of organisational representation, as a result of increasing complexity of organisation structures, like for example the NHS. We talk a lot about our underlying 5D (dimensional) model which has ‘Line of sight’, ‘Work Environment, Development, Reward, and Operating Culture, a comprehensive approach to employee engagement.
Is it not unlike the hopeless variety act asking the audience whether everyone is happy. Is that where the whole exercise falls apart?
Fiona Anderson: What I find interesting is how do you take aspects of what engagement can be and maintain authenticity? I find some companies tackle the subject one dimensionally – it is just about a score, and people see through that. The engagement discussion has been on the table for so long, it feels like it keeps getting churned out.
Sally Smith: Or worse, with companies that spend a great deal of money on rather empty activities. It seems that some companies, particularly those with strong resources, can get lost in the glamourisation of the workspace, rather than concentrating on those things that matter most to people, resulting in an approach that is rather plastic and unauthentic.
Mark Jones: Surveys do have an inherent value, in getting some data to the table, getting engagement onto the Board agenda, and providing a temperature check or barometer of how the organisation is feeling.
Sally Smith: Yes, but the real strength comes when you can link it. Once you have some data, you can start to make links to metrics that evidence business improvement with engagement improvement with; absence, turnover and profit, then you will get attention from peers and management.
Lynda Aldridge: That’s very much where we started from, from that initial data to how we measure it against other measurements, for example this year we’re doing analysis against turnover and absence, to build that business case and see the trending, so it’s not a one hit piece of data.
Nicholas Higgins: I think it’s important because we see surveys as being the big set piece for HR. That doesn’t mean this translates into a big unwieldy process – far from it. Conducting employee engagement surveys, in whatever guise, can parallel accounting, akin to its financial audit. I’d like to see organisations and HR adopting the same view. The survey process can be supplemented with all kinds of activities. One very big concern for us and one I’m picking up at conferences and on the wire is the argument that ‘we don’t need employee surveys anymore’. I attended a conference just last week where a case study pushed this very scenario. The organisation hadn’t done an employee survey for two and a half years, but had recently introduced handheld devices to provide monthly managerteam feedback. There are a number of issues with this that I would hope practitioners can identify with. The use of what amounts to a non-anonymous 360 part-appraisal process as a replacement for an anonymous employee engagement survey process may appear seductive but it confuses rationale and means. Where scrutiny is lacking is dangerous. Before you know it, this becomes accepted practice – it’s a very rocky path.
Linda Burton: We can sit in Head Office and write all sorts of wonderful things and come up with all sorts of innovative ideas, but the bottom line is, we need that cleaner out in that hospital doing the best job possible. We’re measuring engagement because we want to know that we have got people who want to work for us and want to do a good job.
Sally Smith: It is fundamental to understand the engagement each year, because if you stopped monitoring it, engagement will drift because you’re not in touch. Nicholas Higgins: Or even worse, opens it up to managerial game-playing. We need to revisit the premise and ask the ‘why’, ‘what’ and ‘how’ questions, particularly with the data. Anonymity is key in obtaining ‘clean and honest data’, rigorous enough to be used from a research perspective. I’d hate to think HR would get compromised in some of these scenarios because they’ve not realised the bigger picture.
Conrad Bester: When you do major transformation where all business processes are being looked at, each discipline in an organisation, from supply chain to accounting to manufacturing and HR, should not just be provided with a new suite of “magic” processes, such as employee engagement. A new process must add value to the organisation and should be based on best practices benchmarked in your industry or area. HR must then be responsible for implementing its own processes in an integrated approach, with other streams of re-engineered business processes.
Graeme Cohen: What gets measured gets managed, but the problem is, unlike say finance you can’t pull a very simple lever to fix a problem, it is more complex than that and that is why engagement must not just be an HR issue, it must be a shared concern across the organisation.
Lynda Aldridge: Agreed, being able to interpret the data accurately and identify what’s driving it is really important. Fiona Anderson: The real positive change is moving the focus from a purely organisational one to being about the individual, gives an employee an opportunity to contribute and feel ownership for the agenda. This focus leads to more authenticity, which I believe is where you find engagement.
If you have to rely on surveys to see if employees are engaged, isn’t that leaving it a bit late?
Lynda Aldridge: We have people on the front line in Afghanistan, we have people delivering services in hospitals and that public service ethos is so strong in our organisation that I think where you find engaged people, they feel much more supported by the company.
Sally Smith: At the beginning of our engagement journey, we had passionate people, but there was disconnect between the different areas of the business and the organisation itself. To create one organisation, we have focused on strengthening the connections between the organisation, individuals and leadership, articulating the vision in a more accessible, visible and consistent way.
Stuart McPherson: Metrics like KPI’s and SLA’s can suffer if employees are not motivated and engaged. If there’s academic rigour behind the survey, it measures the drivers in a functional and emotional environment, if you get that bit right and you understand the signs behind the survey, you don’t have to wait until your KPIs and SLAs start to suffer.
Graeme Cohen: One of the things that senior leaders don’t always get is, a survey is purely a measurement device. It tells you what is going on. It never tells you why. And if you’re not bolting that bit on, it’s just a survey.
Stuart McPherson: And this is where you have to start looking at the comparisons with this data and that data to say, is this a consequence of the company not commercially supporting a key initiative that could impact on engagement? It goes right back to the business development model in the first place.
Mark Jones: Whilst we may want to agree on a single definition of engagement, I think the messaging may need to vary for different audiences across the organisation. For example, the Board may have a different focus to how line managers may want to consider engagement, which may be different again to how employees view it.
Nicholas Higgins: There are organisations who are so-called Playmakers that are really knitting everything together and leveraging employee engagement to an optimal state. Our Employee Engagement in Organisation survey now has over 150 organisations, but only two percent at the moment are classed as ‘Playmakers’. Over half of the respondent organisations are classed as Play-Actors. These organisations are most probably over-playing the PR stuff and, when you dig deeper, there’s a lot missing.
Fiona Anderson: I think labels are an interesting feature of engagement. It can become faddy which can distract from good practices that do exist.
Jason Spiller: So has employee engagement become faddish, for PR purposes or is it really the embedded successful leadership management practice that everyone hopes for?
Sally Smith: It isn’t a fad with us, it’s a very genuine thrust of our organisational strategy and the most powerful lever we have in terms of changing the culture. We have seen organisational performance improvement with engagement score, tracking improvements across a range of metrics; absence, turnover, grievances, profit per square metre and quality of care – and they are all on the same curve.
Mark Jones: There’s an interesting debate for me around whether having a better business drives stronger engagement or whether having stronger engagement drives a better business. Perhaps the two are mutually reinforcing, but I think we need to be careful in making assumptions about causality with other metrics.
Nicholas Higgins: The danger, I believe, is the automatic expectation, that as soon as you measure something, there is some nice linear relationship, that is A + B = C. Measurement is just a means of analysis and subsequent decisionmaking. It’s how it’s being used that matters. Utilising measurement is about doing something with it. We talk about smart measurement or ‘measurement wisdom’ as one of the Six Pillars. The purpose of defining employee engagement and then measuring it is to actually make you think about your organisation.
Steve Davies: There’s sufficient information out there to show that there’s causal links between how well staff are engaged and how effective they are in their job. Managers get that and it’s a very simple, easy message to sell to them. They also appreciate that it’s about how they would want to be treated as an employee, as an adult, respected, and have some involvement.
Nicholas Higgins: In days gone by sales people with poor results would be fired but nobody ever looked at the equity of the sales areas, the product etc. Why? Because the easier decision was to get rid of the person. It was a classic example of not really looking at the data in the 360 sense. Einstein’s dictum: “You make things as simple as possible but no simpler”.
Sally Smith: Engagement is not the only game in town, it’s just part of the mix. In my experience success comes from incremental improvement across a range of areas which builds more profound improvement across the piece. I am not sure that what influences the other matters, as long as the relevant people understand what will work to improve their organisation.
Linda, engagement in the NHS obviously is like a seismograph of the nation, and bureaucracy is often cited as a dis-enabler.
Linda Burton: In our particular area, our mantra is high trust, low bureaucracy, but whether we like it or not, we are a bureaucratic organisation, so all we can do is reduce bureaucracy and get to the highest trust possible, so that individuals feel they are respected, they have got some control.
A disconnect with the workforce and leadership must be the most damaging cause of disengagement.
Sally Smith: Strong leadership and management is critical. We’ve established a management development programme, and this year we started signposting directly what our expectations are in terms of basic standards of management and the associated behaviours. This is directly linked to surveys, because showing the connections of how you have reacted to survey feedback helps people see how the organisation is trying to make improvements.
Nicholas Higgins: If somebody is going to manage people then they should have at least some accreditation or requisite knowledge. I’m not talking about generating huge external cost, but something internally that says you are able. You can’t just be a manager and think you can get by with not very good people management. In our survey, 70 percent of organisations don’t have a ‘License to Manage’ programme. It really sends a message out to say our organisation recognises good people management.
Lynda Aldridge: Two years ago we moved into the shared services model and we pulled out HR managers from all of our contracts. Before, what you had was little micro businesses, and now you have a shared service model, with a call centre that you ring for HR advice on disciplinaries and grievances. One of the things I think which we didn’t manage as well as we could have, was this piece around making sure the managers felt like people managers again, because they always had their HR person on-site to parachute in to deal with people issues.
Conrad Bester: In the past we had good results in preparing leadership via a formal competency profiling approach. For instance, a particular manager might have to manage and engage with different cultural employee groups across borders. In this case developing the “Cultural Literacy” competency will be important for that manager. The engagement competency to get alignment of organisational objectives from different employees, who are committed to the organisation differently, is therefore quite critical to understand and develop.
What constitutes an effective employee survey that ensures accurate data relating to the levels of engagement across the workplace and how do we know what we are measuring?
Stuart McPherson: Participation levels are important to us, how do you get the maximum sample size possible, respecting the fact that everybody’s opinion matters. The other important element for us is what you actually do with the findings and how you communicate that back to the workforce. Are you using this data in isolation or combining it with other data to glean richer information? It has to be both of these.
Steve Davies: Agreed, the biggest challenge is using the results to do something tangible and meaningful. What staff are interested in is if they said something that is not good, will it change for them or their little work group? But often we don’t drill down into the survey results sufficiently to understand the issues for particular segments or parts of the workforce.
It’s the age-old disconnect issue “well my voice never gets heard”. So how can surveys be improved to deliver more timely and sensitive information that can be acted upon swiftly and decisively?
Linda Burton: There are a number of ways that staff can get their voice heard and the Trade Unions do play a very big part in that. The problem with surveys is by the time you’ve got your results back, and decided what you’re going to do, you’re on to the next one.
Mark Jones: We shouldn’t be positioning the employee survey as the opportunity for an individual to get their voice heard. If individuals feel they need to wait for an annual survey to provide feedback then we are missing a trick. The engagement survey is not about looking for individual voices, it’s more about understanding the collective view. Linda Burton: People can sometimes use the staff survey to unload things that they have been bottling up. Sometimes they send anonymous letters and the reason they’re anonymous is that person just doesn’t want to stand up and be counted. It does not matter that there are mechanisms in place, it’s difficult to deal with inherent cynicism.
Nicholas Higgins: Agreed, employee surveys should never be treated as the only way to initiate a feedback mechanism from your staff. However, one shouldn’t underestimate the qualitative feedback aspect of surveys, so long as it’s categorised and classified in the proper methodological manner.
Sally Smith: There’s no such thing as wrong data, it’s people’s views therefore that’s valid. You can never take a survey at face value, you have to work with groups of staff/volunteers to understand what is under the skin of the score. Engagement isn’t about HR, it’s about all the people who work for an organisation, all we do is run the exercise and apply the professional expertise.
Graeme Cohen: It’s important to consider the different stakeholder groups, and what are the expectations and are they realistic. The survey itself is measuring perception of reality. If we don’t understand the expectations, we are then dealing with grey areas. So when it comes to actually making change – if we don’t understand the expectations and we can’t ground the perception, that leads to disconnect.
Conrad Bester: My opinion on how close data is to reality versus perception, is that it again depends on the reason why you’re doing the engagement. I think back on the Hawthorn experiments of long ago – the mere fact that you asked people their opinion or to be “involved in an experiment” is where you often get unexpected real engagement from.
Sally Smith: It comes back to authenticity, if it’s not well intentioned, if you’re not trying to affect real tangible change, people are just going to see through it.
And you can’t do an employee survey on how employees rate the employee survey.
Nicholas Higgins: I would advise you view employee engagement and employee surveys, as some form of change instrument, whether small/transitional or big/transformational. Either way, incorporating an OD view, you never fall into the tick-box or process mindset. Some managers may say the survey information isn’t telling them anything new. Well, that’s fine, but the point is, why are you thinking that you’re not hearing anything new? You go back to the double loop learning aspect we use a lot. If you’re expecting a particular answer, what is driving your expectation of that answer?
Mark Jones: It is also important to ask some questions about hot topics, irrespective of whether or not they relate directly to engagement. For example, we are working hard on being a more joined up, collaborative organisation so the engagement survey presents a good opportunity to ask people how they feel we are progressing in this area.
Nicholas Higgins: That’s fine, because as long as you’ve got a standard set of engagement questions, you can always add-on/customise, as long as your question count doesn’t go exponential. We talk often about the mix, the standard question-set, plus the customised. That’s really how surveys are, that’s the reality. When it comes to surveys, speedy response is so important. The survey is of no use until the information is returned and communicated/acted upon. Too often the gap is too long, speedy response for us is absolutely critical for organisations.
Perhaps the onus should not be on just accuracy, but whether it supports people to be honest.
Nicholas Higgins: It’s both in my view, there’s a real methodology to question-setting which provides the organisation with accurate and relevant data. There’s quite a process that organisations need to make sure they go through.
Graeme Cohen: Often one of the things that we see is that the driver of the lag is when the board gets to see the findings.
How is engagement being gauged for its contribution to business performance in consideration of attrition, retention, absenteeism, for example, and how accurately is the return on investment being quantified?
Nicholas Higgins: It’s about understanding what it is you’re trying to actually achieve as a business. Very few organisations have a single indicator of success and many organisations have quite diverse teams in terms of output/objectives and the problem is do you know what’s being collated in your organisation?
Sally Smith: From the beginning, we linked metrics to the engagement score so that we could track over time and help to convince managers to realise the importance of this aspect of work. We started by linking our engagement score with absence, turnover and grievances and recently we have started to link to quality of care in our centres and profit per square metre in our shops, and we’ve seen that where engagement improves, the other metrics improve.
Steve Davies: It’s still possible to get into performance for individuals or teams, you can break down performance objectives for the year, which are measurable, and the performance management mechanism provides a manager with a means of assessment at the end of the year.
Nicholas Higgins: What I don’t get is the apparent disconnect between productivity/performance and engagement at manager level, even though the performance productivity parameters are there. It surprises me that so few organisations utilise this resource. Mark Jones: I think managers do understand that this is important, but they’re not necessarily labelling it engagement. They may think of it in terms of ‘motivation’ or ‘commitment’, but engagement wouldn’t be the first word that would spring to mind.
Nicholas Higgins: What are we telling the managers and how much do they really understand? I think it’s about education. Accountancy has its own language, Marketing has its own language, IT has its own language, everybody has their own language, why is HR different? I don’t buy ‘Oh it’s a bit technical, I don’t like the term ‘engagement’ or ‘competency’ or ‘human capital’ or whatever. Well OK, but what’s driving that response?
Sally Smith: I think the point is how to communicate, let’s just talk to the people in our organisation in their way and convince them of the strength of certain strategies.
That is the problem with statistics, they are inherently subjective. What is the best approach to benchmarking employee engagement scores and how can you evaluate your business’ performance against peer organisations?
Graeme Cohen: There seems to be an expectation that engagement only ever goes upwards but there are scenarios where it’s OK to have it go down.
Mark Jones: External benchmarking can provide a bit of rationale to understand those areas that other organisations find equally difficult or easy to achieve high engagement scores. However, I think of equal, if not greater value, is internal benchmarking. Because culturally, large parts of the organisation should be fairly similar, so it tends to point to areas of the business that are performing less well than others, in similar circumstances.
Steve Davies: I think the danger with benchmarking with other organisations is that when you start to try and understand why they have got a different score to you, things can start to unravel. It comes down to the way in which the other organisation is set up or their culture. As a result, you never get a decent correlation, in terms of how you might perform better. So I think it’s much more useful to internally benchmark with other parts of the business and try and understand and replicate success within your own organisation.
Conrad Bester: I have to look at benchmarking regionally in a global platform. Just to take typical size chemical businesses is not enough. I have to benchmark in very specific, often small geographical areas only. Metrics such as employee turnover percentage would be quite specific to that area, e.g. the large, industrial Houston versus a small town in Pennsylvania. So again context.
Linda Burton: The difficulty for us is, who could we be compared to? I agree, if you find an area that’s really good, see if you can utilise those people and share the learning.
So benchmarking itself could be quite misleading, what exactly is being compared and contrasted?
Graeme Cohen: Even though benchmarking looks really objective, the way it gets interpreted is almost always subjective; if score is right at the top of the engagement percentiles, everyone says “fantastic” we’re at the top”, but if it’s at the bottom, everyone says “but we’re totally different from all the others!”
Nicholas Higgins: Benchmarking is part of measuring methodology, not the other way round. I think external benchmarking is limited, because it gives managers all the reasons to tick a box. I much prefer an organisation that can’t compare itself to anybody because then they’ve got to think through the implications of the results.
Sally Smith: I think you’ve got to do both. Part of the benefit of external benchmarking is it sets a contextual challenge. We participate in the Best companies Not for Profit index to be able to benchmark our engagement against peer organisations and it helps us measure our aspiration.
Nicholas Higgins: Employee engagement is really a lightning conductor for HR to be at the core, not forgetting talent management and everything else in between, in organisations, regarding contribution to outcomes and performance. If managers and the Board get behind HR, then it won’t be such an uphill struggle.
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