THE ENGAGED

employee

What is Employee Engagement?

Employee engagement is an employees relative rational and/or
emotional commitment to their job, team, manager, and organization,
which results in either increased discretionary effort, or willingness to go
above and beyond their normal job and/or intent to stay.
Increased discretionary effort and intent to
stay translate into the tangible
engagement outcomes of performance and
retention.

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To better demonstrate the framework of

employee engagement,

the illustration below outlines the different engagement levels across

the workforce.

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This framework, created

and performed by the HREF
(HR Executive Forum of the
Human Resources
Leadership Council) was
applied to more than
50,000 employee surveys,
and represents participants
in various industries across
29 countries.

As you can see from the framework, employee

engagement is a key indicator of performance and/
or employee retention;
Therefore its extremely important for companies to ensure
that their employees are at an appropriate level of
engagement. Industry analysts spent several months
gathering the research outlined in the illustration, and came
to several conclusions based on their findings.

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20%

Highly committed employees are likely to seek ways to

improve the effectiveness of their work; therefore,
increasing employee discretionary effort from the lowest
level to a high level improves performance by as much as
20%.

The HRLC (Human Resources Leadership Council) is an

organization created specifically for HR professionals in mid
to large-size organizations, and is a key resource in solving
the most challenging issues with unbiased research and
feedback.
That being said, they were able to break down the results of the employee
engagement study into something more tangible to employers. An easy way to
remember the relationship of employee engagement to performance is in terms of the
10:6:2 rulethat is, for every 10% improvement in employee commitment, employees
will realize a 6% improvement in discretionary effort, which in turn results in a 2
percentile improvement in performance.
Although those numbers may seem small in terms of one or two employees, they
would have a much larger impact on the employee population as a whole.

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Why is the employee important to your company?

A companys employees are its most important asset;
therefore its vital that they are fully engaged in their jobs and focused on achieving the
organizations goals and objectives.
If you ask the owner of any organization what kind of employee he or she would like to employ, you
almost always get the same answer.

They want individuals that behave as intrapreneurs.

The term intrapreneur is used to describe those individuals who take the initiative in an organization
to undertake something new, without influence from anyone. They are essentially inside
entrepreneurs. The intrapreneur focuses on innovation and creativity, and then turns those ideas into
lucrative endeavors for the organization. Intrapreneurs are highly engaged employees, always giving
their best effort.
In order for an employee to behave as an intrapreneur, that employee needs to feel empowered or
encouraged to make contributions and decisions for the organization.

They need to feel as if their voice is heard and that the suggestions or recommendations they
bring to the organization matter. Thats where the importance of engagement comes into
play.
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Companies with high engagement experience

more than 5% in operating margin and more
than 3% in net profit margin as compared to
those companies with low employee engagement.

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This graphic comes from a study

completed and published by Towers
Watson in 2011 (http://
www.smartkpis.com/blog/tag/
employee-engagement/) on the
Engagement Gap and the affects
Engagement have on an organization.

Not only is there a 5% spread in operating margin, companies with low

engagement actually experience negative margins due to the engagement
problems. You see a similar result with net profit.

Another obvious concern is how engagement affects the retention efforts of an organization.
Take a look at the graphic
and the disparity between
the engaged/enrolled
employees versus the
disenchanted/disengaged
employees.

The percentages are very telling of what a disengaged workforce can do to an organization.
Half the population of the disengaged employees are prepared to leave the company at any
given moment, and an additional 35% would seriously consider leaving if another
opportunity presented itself.

Those numbers dont sound very promising, do they?

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Employee engagement doesnt always resonate with non-HR

professionals;
However, when you can show the relationship between engagement scores and bottom-line, financial
outcomes, everyone pays attention to the engagement index. Establishing this critical link between
people and performance help HR professionals prove that people-related interventions are indeed a
worthwhile investment.
Finding and retaining the right talent
is key in maintaining a profitable
business everyone agrees on that
point. Nonetheless keeping them
engaged is even more important, as
engagement is the key that drives
lean organizations forward and
sustains business performance in
competitive and dynamic market
conditions.

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A recent report on the American workforce shows that nearly half of all
Americans in the workforce are not fully engaged, or whats worse they are
disengaged.
This phenomenon is known as the engagement gap

and references the huge disparity

amongst those employees that are totally engaged in an organization versus those that are simply
there for a paycheck.

It is estimated that US businesses lose an average of $300 billion each year in

productivity due to the engagement gap. Those numbers are astounding!
Employee engagement delivers more than financial benefits. Strive to be an employer
of choice. Remember that employees are a companys most important asset, and
therefore should be treated as such.
Companies dont promote misuse or abuse of the other tangible assets of an organization.

should employees be any different?

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Why

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What Drives Employees?

The question now is, How do I engage my employees in the
organization?

To answer that question, first look at the different levels of engagement. Engagement, as it relates to
the Global Engagement Gap, is broken down into 3 categories:

actively disengaged.

Engaged employees

engaged, disengaged and

who love their jobs and believe

in their employer, the work theyre doing, and the goals

of the organization are fully engaged employees. They
exhibit high levels of passion and creativity, and feel
appreciated for the value they add to the company.
These employees feel a connection to the company, its
products and/or service, and generally express a positive
outlook. And they motivate and inspire those around
them.

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Disengaged employees

view their jobs as merely a way to earn a

living. They come to work on time, and accurately perform their

responsibilities, yet do little beyond the expectations set forth according
their job descriptions. There is usually no passion or creativity exhibited
by these individuals, and therefore no desire to grow or nurture a career
with the company. They also (unfortunately) influence those around them!

Actively disengaged employees

are the most problematic in terms of performance, as these

employees are unhappy, disgruntled, and usually allow their negative outlook on the company and/or
position to manifest itself in their work. In addition to their own performance issues, they have a
tendency to bring down the morale of the engaged employees by constantly voicing their discontent
and poisoning the minds of those employees that are otherwise excited and happy with their jobs.
Although actively disengaged employees usually only account for a small percentage of the
population, they can have a disproportionate effect on the positive influences of engaged employees.
Think of it this way disengaged employees place themselves on
auto-pilot. They add little value to a company; yet they arent
destructive. Actively disengaged employees act out their displeasure
and seek to find allies to jump on the bandwagon. Its important that
this type of behavior is ended before it begins.
The key in stopping this behavior before it starts is to determine what
drives your employees. How can you ensure that your employees
are excited to come to work and fulfill the duties of their job,
above and beyond what is expected of them?

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What Drives YOUR employees?

Employee drivers have changed dramatically in the last decade to reflect a
changing set of work demands and the mentality of the new age workforce.
Expectations have transformed on both ends of the spectrum.

With the onset on smart phones, employers have

constant 24 hour access to their employees, who are
often expected to make themselves available. Conversely,
employees are no longer satisfied with a paycheck and a pat on
the back. They expect to have a rewarding, fulfilling position
that affords them many benefits, i.e. career advancement, brain
stimulation, challenging work, and creative autonomy.
All these things play an important role in increasing employee
engagement.

There are two basic categories of what drives

employees:

Extrinsic and Intrinsic Rewards.

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Extrinsic Rewards

Are those tangible rewards (historically monetary) given by employers

such bonuses, pay increases, and benefits. These are the rewards
that employees want and appreciate, but usually only provide a temporary
satisfaction and fail to encourage long-term retention.

Intrinsic Rewards

Are more relevant in todays workforce, and are those psychological

rewards that employees get from doing meaningful work and
performing their jobs well. Most of todays workforce is given the
autonomy to self-direct to an extent, which means that they use their
intelligence and rely on their professional expertise to make decisions.
Making decisions, problem solving, and innovating are all huge motivators
to the current and future workforce.

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Employee
Engagement Model

The model, taken from Gallup study on Employee Engagement (http://

www.boston.com/jobs/nehra/062308.shtml), represents those intrinsic
rewards that employees look for and how they are transformed into
tangible results for an organization.

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Cultures of engagement combine the factors along the left side of the model and
foster an environment for happy, fulfilled employees.
Each piece plays an integral role in fostering such an environment.
Managers can do an excellent job of constructively criticizing and mentoring their direct reports;
however if the employee is never allowed to voice his/her opinions or concerns about that manager or
the organization, the feedback aspect of engagement is lost. Thats why it is extremely important to
have frequent town hall meetings, employee satisfaction surveys, and various open forums so that the
employees have a sense of inclusion in the on-goings of the company.

Trust in leadership goes

hand-in-hand with the two
way feedback.

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The only way employees will build a trust in their leadership team is if they are
communicative and keep employees informed on upper level decisions.
As we discussed earlier, employees mindsets have changed drastically over the last few decades.
Employees have become more and more driven and are constantly thinking about their career tract
and the next step in their career. This is why its so important that employees understand their role
and how it affects the company; they want to ensure that what they are doing is

meaningful and therefore progressively develops their career.

Employees that are allowed to share in the
decision making process are more likely to
be engaged, as they feel as if they have a
stake in that decision and therefore would
like it through to completion. Completing a
task or project gives them a sense of
accomplishment, which also ties back to the
career development piece. Each of these
factors overlap in many ways and come
together to create an engaged culture.

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How can managers and employers turn those

intrinsic rewards into a more engaged, more
dynamic workforce?
Direct managers are in the best position to increase employment engagement.

Managers are the closest to the employee, and serve as the link between the employee and the rest of
the company (in terms of organizational hierarchy).

They should understand how to tap directly into the contribution that the employee
makes and ensure that the value from that contribution is apparent and relevant.
No one wants to feel as if theyre just going through the motions. They need to
understand the bottom-line effects their role has on the corporation. For
example, an AR clerk may feel as if they are merely a paper pusher when
in reality they are the ones that ensure that funds are received and
properly allocated. If not for them, there wouldnt be money for future
projects, paying bills, or even funding payroll!

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Make sure they know

how important their
work is and that they
are appreciated.

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Employees need to know how their work impacts the companys success.

They need to understand that the work they provide aligns with the goals of the organization.
Managers can ensure this happens by making certain that the vision and mission of the company is
apparent, and is incorporated into each project or task their employees are performing. Reaffirm the
values of the company; building a cohesive team is more valuable than many may realize.
Managers can also encourage their employees to take
their careers into their own hands. Make sure they
understand that there is top-down support. If an
employee is interested in a particular training that
could enhance their work performance, encourage
them to move forward with it. Even if your company
doesnt offer tuition reimbursement or pay for those
types of classes, the employee should be recognized
and praised for taking the initiative in advancing in
their careers.

One of the biggest mistakes managers make is assuming that employees know
that their work is appreciated; or conversely, assuming that employees know that their current
work performance is sub-par. Dont make that mistake

Tell them their work is valued and appreciated.

Constant feedback and recognition is critical in ensuring an engaged workforce. If there is never any
feedback given regarding an employees performance (good, bad, or indifferent), that employee might
surmise that his work is invaluable altogether. Its not hard and it makes a world of difference to the
attitude of your employees.

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Managers shouldnt downplay the affects formal

mentoring or coaching can have on an employees performance.
If there is something a manager sees in an employee that they want to foster and grow into that next
corporate genius, he or she should spend the time to take that employee under their wing and do
what they can to encourage that employee. Knowing that you have one person that believes in you
and wants you to succeed speaks volumes.

Lastly, managers need to ensure that

their employees voices are heard.
Make sure that employees feel comfortable
discussing any issue or concern with their
manager and that managers respond
appropriately.

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What can Companies do to Promote Employee

Engagement?
While managers play a huge role in ensuring the employees are engaged, the actual employer or the
organization as a whole is also responsible for making sure that the environment is such that
employees are happy and want to come to work each day.
Employers should provide their employees with various avenues that assist them in understanding
how the company operates as a whole. In theory, this is covered during the initial employee
orientation; however as an employee grows with an
organization and begins to understand how some things
come together, it would be helpful if there was something
available that tied everything together.
One great practice many corporations are starting to adopt is
having what is often referred to as a Student of the Business
course. This course basically takes employees through each
entity of the company, what they do, and how they interact
with all other aspects of the company. It shows each moving
part and how they all work together. Departments or
divisions that may have once been siloed have a better
understanding of just how important their role is to the
company, as well as what that guy on the other side of the
building does.

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This type of training course is helpful because it brings together employees that may have
otherwise never interacted while it also proves to be a wonderful learning experience for
everyone involved. Its usually a lot of fun too often presented in the form of a game show where
employees guess pricing models for products and services the company offers, or something similar.
Its generally culminated by each graduate receiving a t-shirt or some symbol confirming that they
are now a Student of the Business. Although the t-shirt or whatever item provided is usually a very
small token, employees respond well now understanding that they have an integral part in the success
of the company.

Another critical thing to consider is how the executive team sets the culture of
engagement.
employees are keenly aware of the Senior
Leadership staff and how they interact with the various levels of a corporation.
Many employers dont realize this but

Whether they take the time to involve themselves with the lower level employees, or whether they
have an us versus them mentality, it doesnt go unnoticed.

You want to create an

inviting environment, free of
needless bureaucracy.

Although the senior executives are certainly to be respected,

the days of a hierarchal workplace where lower level
employees are treated like the untouchables are long
gone.

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Innovative corporations have learned that creating an open atmosphere proves

to be much more effective in engaging employees.
Take for example RaceTrac Corporation RaceTrac has adopted the Fishbone seating arrangement
throughout their entire corporate office.
This seating arrangement supports the idea that although there are varying levels of positions within
the company, no one person is more important than the other. There are no offices, only meeting
rooms to be used by anyone that chooses to book the room. Even the Senior Vice Presidents sit at a
desk, in the same area as an entry-level employee.

This may be a little drastic for some

companies but its an excellent
example of how employers are going
the extra mile to ensure their

employees are happy and feel

appreciated.

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What Can HR Do?

Human Resources has a complicated role in employee engagement.

HR is there to assist and should have ideas to increase employee engagement. However, because HR
has no direct link to employees, its important that they have a strong working relationship
with the various managers and departments so that the engagement efforts are not lost.

The HR department should make itself available

and be able to provide resources to

those managers or departments that request information on how to increase engagement.

Host seminars, develop workshops, create reference materials do whatever is necessary so

that your organization is armed with resources that will promote an actively, engaged
workforce.
Although HR may merely serve as the middleman between a department and the rest of the
organization, they can do their part by providing resources to the various managers
on an ongoing basis. If the tools are put in place and made a priority, there is no reason that the
idea or notion wouldnt trickle down to those that its meant to affect. Since recruiting is a function of
HR, the HR team is responsible for making sure that organization is equipped with
high energy, highly responsive individuals that will work toward the common goal of increasing
employee engagement.

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HR needs to set in place a mechanism to gauge the levels of employee

engagement

and keep the motivation levels high. This can be accomplished through periodic

surveys and/or town halls/meetings. Surveys should be simple and straightforward which
can elicit the honest opinion of employees on various issues ranging from work satisfaction to coffee
quality. Trying to hide real issues in the survey will get people to give inaccurate

opinions and this will have a negative impact on the future policies that the
management wants to implement.

Remember that HR is highly respected throughout the organization.

If engagement is stressed within Human Resources, other departments will have the feeling that this
is something that the CEO or Senior Leadership is in favor of and therefore be more willing to
promote.

Engagement encompasses so many different aspects; its easy to get overwhelmed when
starting from scratch. Just keep the following tips in the checklist below in mind and you will be well
on your way toward having a fully engaged workforce:

Build a Business Case for employee engagement: Build the business case that shows the financial
benefits. Do your research and go to senior management with tangible, quantifiable findings.
Survey your employees: Establish a benchmark by conducting an employee survey that measures
what matters to your employees. Also, remember when conducting an employee engagement
survey, commit to act on the results or don't bother spending the time and money conducting the
survey.

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Make it personal: Ask people how they perform when they are not engaged versus when they are
engaged and consider the implications for the organization. Then dig deeper to determine what
contributes to that engagement.
Incorporate the vision of the company: Create a mutual vision of what an engaged culture can look
like. It is key to acknowledge that each department or function may have different engagement
drivers, so build in flexibility.
Create a strategic framework: Building from your vision, create a document that is easy to
understand and that aligns the organization vision, values, aligns desired behaviors with results
Make Managers a priority: If the middle managers dont go for it, your employee engagement
program is destined to fail. Spend extra time ensuring they understand and endorse the program.
Build engagement into their performance reviews.
Recognize desired behaviors: Build your recognition programs around desired results -- both
behaviors and business results.
Communication is key! This cannot be over emphasized. Make sure that communication is
consistent and ongoing, and this isnt just a one-time thing that falls by the wayside.

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Successful organizations understand the importance of

engagement.
Now that youre ready to start putting measures in place, youre one step
closer to ensuring that your company is staffed with fulfilled, fully engaged
employees. It can be overwhelming but its definitely doable. Just remember to
take advantage of the resources you have available. In addition to the
checklist, there are lots and lots of case studies online that you can reference
to determine what will best fit your corporate culture.

And with the new technology and software available, youll be

well on your way in no time!

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