The Engagement Equation

Leadership Strategies for an Inspired Workforce

Christopher Rice, Fraser Marlow, Mary Ann Masarech

• Publisher: Wiley
• Year: 2012
• ISBN:
  9781118331996
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

Create a culture of engagement and build high-performance culture

The Engagement Equation explains the drivers of employee engagement, and how you can use improved engagement to execute strategy, reduce costs, and meet your organizational goals. This book describes a unique engagement model that focuses on individuals' contribution to a company's success and personal satisfaction in their roles. Aligning employees' values, goals, and aspirations with those of the organization is the best method for achieving the sustainable employee engagement. The Engagement Equation is designed to provide a framework that will help you move the needle on engagement.

• Explains how to plan and execute a sustainable organization-wide engagement initiative
• Shows how to avoid the engagement survey analysis-paralysis trap
• Shares ways to align employee contribution with strategy
• Encourages leaders to pay attention to and better understand your organizational culture, and much more

Ultimately, it's the daily dynamics at play in your team, your division, and your organization that matter most.

Chapter 1

What Is Engagement Anyway?

When the engagement you want isn’t there, you don’t need a survey to tell you that. You can feel it when you walk into the room.

—Keith Rodwell, group executive, BOQ Finance (a 137-year-old Australian financial institution)

Critical but Elusive

Most people have experienced periods of full engagement at work. Yet as we have interviewed hundreds of executives and worked on engagement initiatives around the world, the lack of a common definition is striking. Ask one executive how she defines employee engagement, and you will get a vague statement about discretionary effort and motivation. Another might say it’s about being in the zone or being married to the company. It is one of those experiences that is more easily described by engaged employees than defined by observers.

Ask those observers what engagement is, and you will still get disparate definitions. A problem with solving the mystery of employee engagement is that it’s both critical to business success and elusive in its definition. But if we’re going to move forward to discuss increasing engagement, we need to set up a common framework. First, let’s consider some of the most popular definitions that don’t quite work for our purposes.

Engagement Is Not. . .

Satisfaction Alone

In the early days of employee surveys, the primary focus was on satisfaction. Organizations wanted to know what kept their employees happy. For many this pertained to preventing union mobilization. As the Western economies shifted from industrial to knowledge economies, the emphasis of organizational practices shifted away from satisfaction alone.

Yet many of the research firms stuck with that initial definition, rebranding early satisfaction surveys as engagement surveys. The result, sadly, is that today many people still equate engagement solely with job satisfaction. This early misnomer gave engagement a bad rap in boardrooms as a soft concept, far removed from any business drivers. Some believed it created a workforce of happy, entitled, and potentially unproductive employees. Why would any fiscally responsible businessperson want that?

Common measurements of satisfaction that are restricted to benefits, work environment, and compensation (essentially a customer satisfaction survey for HR policies) set organizations up for failure. They reflect a transactional employer-employee relationship that is only as good as your organization’s last round of perks or bonuses and cannot be sustained through market dips and organizational change. Psychologist Frederick Herzberg called these benefits hygiene factors that help prevent dissatisfaction, but do not necessarily build satisfaction. For example, increased compensation may not increase satisfaction, but unfair or inadequate compensation will cause dissatisfaction.1

Clearly, satisfaction alone is not engagement. If measured correctly, satisfaction is a critical ingredient.

Motivation

Some researchers point to theories of intrinsic motivation and encourage organizations to simply hire engaged (read, highly motivated) employees. This focus recognizes that engagement is not something your organization can do to its workforce. Having intrinsic motivation is a step in the right direction, because everyone in your workforce shows up every day with individual motivators, values, interests, and goals.

Still, employee engagement reflects a relationship between employees and employers, and as a result, people cannot be engaged outside of the context of their job.2

Commitment

Another mistake is to confuse the terms engagement and retention (even though they are closely linked). Most studies suggest that engaged employees are more likely than their disengaged colleagues to stay with the organization. However, many disengaged employees actually plan to remain—and do so for all the wrong reasons!

Engaged employees stay because they like their work—which is what they give to your organization in their engagement equation. The disengaged stay because of what they can get, such as financial rewards, career opportunities, job security, or comfortable working conditions. Intent to stay at a company, therefore, is not necessarily an accurate indicator of engagement. And retention of the wrong employees is simply bad business.3 Being disengaged by no means indicates a total lack of commitment, but a commitment to the wrong things.

Let’s move on to the definition of engagement that we’ll be using throughout this book.

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EE = MSi + MC0

Full employee engagement represents an alignment of maximum satisfaction for the individual with maximum contribution for the organization.

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To understand this definition and help make it actionable for you as a leader trying to increase engagement levels, we need to explore the relationship between employees and employers.

The Playing Field: The Job

Jobs represent the intersection of employees’ personal pursuits and your organization’s interests.

MCo = Maximum Contribution

As a leader, you are no doubt aware of your organization’s strategy for achieving success. That definition of success should be shaped by your organization’s

• Goals, which reflect its mission (sometimes called a purpose or reason for being) and long-term vision (e.g., increased market share or specific financial targets)
• Core values or principles, which guide the decisions and behaviors of your workforce in pursuit of the organization’s goals

In order for your organization’s strategy to become reality, your employees must be willing and able to perform mission-critical tasks successfully. We call that maximum contribution. Jobs exist to drive your organization forward, to fulfill its mission, and to achieve its goals. In an ideal world, all employees deliver maximum contribution, but the reality is that on any given day, employees are, for multiple reasons, at different levels of job contribution.

News flash: what your organization needs for success is only half of the story and just half of the engagement equation.

MSi = Maximum Satisfaction

Individual employees are on separate paths toward their own highly personal definitions of success. Sure, they need a paycheck. But they, too, have values, career aspirations, talents, development goal, and a need to fit their work into the broader context of their lives.

Unlike your organization’s definition of success, there is no single definition of success shared by all employees. Individuals are all looking for work that works for them personally. We classify all those individualized interests under the label of maximum satisfaction at work.

Of course, employees, like your organization, don’t always get exactly what they’re looking for. They are achieving different levels of job satisfaction on any given day.

Engagement Happens at the Apex

Organizations are seeking maximum contribution from each individual toward corporate imperatives and metrics of success. Individual employees need to find purpose and satisfaction in their immediate work and have long-term visibility on a future with the organization.

The two are far from mutually exclusive and, in fact, feed off each other. The challenge for you is making sure that the mutually beneficial relationship is not left to chance, but managed skillfully to create sustainable levels of high performance. This is your engagement strategy.

At the apex of this model—(A) in Figure 1.1—fully engaged employees are getting and giving the maximum. Engaged employees are not just committed. Nor are they just passionate and proud. They have line-of-sight on their own future and a clear understanding of the organization’s mission and goals. They are enthused and in gear, using their talents and discretionary effort to make a difference in the organization’s quest for sustainable success.

FIGURE 1.1 The Employee Equation. The top of the diamond is the apex. Full engagement occurs at the alignment of maximum job satisfaction and maximum job contribution (A).

We want to emphasize the word sustainable. Most organizations can generate bursts of contribution in the short term using approaches other than engagement, but these will be short-lived. Building a culture of engagement takes effort, but once established it will sustain high performance in your organization over time.

For an animated description of this engagement model, go to www.TheEngagementEquation.com/theX.

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I Know It When I See It

Here are some of the ways leaders worldwide described this equation:

• “Employee engagement is about mutual effort: The company must work to engage the employees, but the employees must repay with contribution. We have a saying in China that you must dedicate yourself first before you expect dedication in return. That’s a big part of our culture.” —Ann Huang, senior HR manager, Red Star Macalline, China’s largest furniture retailer, speaking about the win-win aspect of engagement
• “Having people stay with you is not a sign of engagement. There is always a risk of complacency in middle manager and senior manager roles. We see relatively little turnover, and Indian companies can’t face the idea of firing anybody after 10 years of service. In many ways it’s a hangover of the caste system in the corporate world. What is needed at this level is a resetting of expectations, a recalibration.” —Judhajit Das, chief human resources at ICICI Prudential, one of India’s largest private insurance companies, describing the need for alignment and contribution, not just satisfied employees
• “People need to be compensated well but it is only one tool. At certain levels, as you progress in your career, compensation will not do it. Responsibility, new projects, and opportunities are more important.” —David Norton, former company group chairman, global pharmaceutical giant Johnson & Johnson, on the importance of intangible motivators

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Short-Term versus Long-Term Engagement

Engagement can fluctuate day to day based on the task at hand and events in the work environment. If it’s a moving target, how can we refer to and act upon engagement? For the purpose of organizational engagement, we are talking about a mid- to long-term level of engagement: one that does not pertain to motivation around a specific task, but more in terms of an employee’s relationship to his overall job. Each job will include enjoyable and productive tasks. It will also include less satisfying and less productive activities.

What we are interested in here is the balance for the longer term. Certainly when employees sit down to discuss career devel...

Table of contents

• Cover
• Contents
• Title
• Copyright
• Preface: Standing on the Shoulders of Giants—The Legacy of Buck Blessing and Tod White
• Acknowledgments
• Introduction
• Chapter 1: What is Engagement Anyway?
• Chapter 2: The Five Levels of Engagement
• Chapter 3: Global Insights and Macro Trends
• Chapter 4: Shared Accountability and Daily Priority
• Chapter 5: A Dead Battery Can’t Jump-Start Another
• Chapter 6: Culture
• Chapter 7: Seems Kind of Obvious: Align Your Employees!
• Chapter 8: Dialogue and Empowerment Trump Action Planning
• Chapter 9: Career Development
• Chapter 10: Measuring ROI
• Chapter 11: The Good, the Bad, and the Ugly of Engagement Surveys
• Chapter 12: Final Considerations
• Appendix
• Interviews and Contributors
• Endnotes
• Index