When most people think of the phrase "disengaged employee," a caricature of an overtly careless worker often springs to mind: head slumped on desk, rumpled appearance and eyes on his watch, ready to sprint out at five sharp. But since most workers don't act this way, it means they're engaged, right?
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According to Gallup's 2013 State of the American Workforce report, the exact opposite is true: The majority of American workers are actually disengaged. "Currently, 30% of the U.S. workforce is engaged in their work, and the ratio of engaged to actively disengaged employees is roughly two-to-one, meaning that the vast majority of U.S. workers (70%) are not reaching their full potential," the report stated. So it seems it's not so easy to spot who's disengaged.
And even though most employees consistently report for work each day, disengagement has a material impact on a company's productivity, and therefore, its profits. In the report, Gallup cited data collected from its Q12 employee engagement survey customers, stating that "Work units in the top 25% of [the] Q12 Client Database have significantly higher productivity, profitability and customer ratings, less turnover and absenteeism, and fewer safety incidents than those in the bottom 25%." The organization also estimated that "active disengagement costs the U.S. $450 billion to $550 billion per year."
However, if the adage "what can be measured can be managed" holds true, HR managers have the opportunity to reverse the tide of disengagement, provided they can get a handle on their workforce's engagement level.
But prior to being measured, the concept must first be defined. So what is employee engagement, really? And how can it be evaluated? Read on for user and expert advice about how to define the term, as well as how to measure and analyze it through a survey.
Employee engagement is not synonymous with satisfaction
Yvette Cameron said a common error is to confuse satisfaction with engagement, and many of the surveys designed to measure engagement have traditionally blurred the lines between the two.
"You take those results and say employees who are generally satisfied are engaged, but engagement is more than that; you have the sense that you have autonomy, that your wellness is a concern -- not only your work performance, but your physical wellbeing," said Cameron, research director for human capital management (HCM) technologies at Stamford, Conn-based research firm Gartner. "So as far as measures go, there are many different [ones]."
So if an actively engaged employee isn't synonymous with a satisfied one, what is employee engagement? Cameron said while there are many definitions, the one that resonates the most with her is the willingness to expend discretionary effort at work.
Kenneth Finneran, chief people officer at the Americas division of logistics services company Hellmann Worldwide Logistics, said his team didn't stress over hammering out a clear definition when it began an employee engagement initiative in 2010.
"If some of the best researchers in the world can't agree on a standard definition, I certainly did not feel the need to try and do so for our organization," he said. "Instead, I'd suggest that organizations put forward some of the best definitions and research and facilitate an open dialogue with management at the buy-in phase."
He explained that the Germany-based company's executive team pieced together phrases from definitions put forth by a variety of research firms -- including Bersin by Deloitte, Gallup, BlessingWhite and Conference Board -- in accordance with what best fit with the company's brand, culture and focus on driving strategic results. "Because definitions of engagement vary so widely, that is precisely why we introduced multiple definitions and engaged the leadership in a discussion around what it is and how to gauge outcomes," he said.
Benchmark data is critical in survey provider selection
The next step for Hellmann was to select and deploy a survey from a professional provider to measure the current level of employee engagement. Cameron said this traditional method of measurement can be a good place to start.
Finneran listed several features HR managers should look out for when vetting survey providers:
- Benchmark data
- Ability to customize the survey for specific company needs
- Confidential administration and assistance with communication at launch
- Compilation of results and comparisons to benchmark data
- Suggestions for communicating and acting on data
- Ability to assist in briefing executives and project team on data results
The team at Hellmann ultimately chose HR Leadership Council as its survey provider, and the survey was deployed in early 2011. It had 65% participation in its initial year.
Finneran explained that the HR Leadership Council survey is broken up into eight indices that measure various aspects of engagement, such as benefits and compensation, communication, manager quality, employee retention and career development. After employees took the survey, the provider compared Hellmann's results to 75th and 90th percentile benchmarks per the company's request. Areas where the company had relatively low scores included career development, communication and benefits, and compensation, Finneran said.
But if definitions of employee engagement vary depending on the survey provider, can benchmark data really be trusted? In Finneran's view, HR managers should not only trust benchmark data, but also use the research on how employee engagement impacts profitability to bolster business cases for employee engagement initiatives.
Use survey results as a jumping-off point to drive change
However, Finneran was quick to point out that an employee engagement initiative doesn't end when the survey results are received. It's only just begun.
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"The reason why [a survey] doesn't equal an engagement initiative is that [it] simply provides data, but it is the set of actions that come as a result of the survey that truly impact engagement. Without a commitment to actions based on the results, I would suggest not doing a survey at all," Finneran said. "If a company is not truly committed to acting on survey results and areas for improvement, then it is a wasted initiative."
Hellmann responded to the low-scoring areas by expanding corporate learning, pushing the wellness program and holding managers and other business leaders accountable for improving engagement on their teams, among other actions. A year later, Finneran said engagement scores on all eight indices increased, and the company ranked in the 75th percentile in three categories, and 90th in four others.
Besides treating employee engagement as an actionable business driver, Finneran said other best practices in employee engagement initiatives include gaining executive support, setting the bar high by striving to reach benchmarks instead of merely surpassing the median and integrating engagement into broader talent management frameworks.
And what have the results been to date? "Greater employee satisfaction, commitment, contribution, discretionary effort [and] higher trust levels," Finneran said. "[And] all of these lead to greater profitability, productivity, customer satisfaction, innovation and lower employee turnover."
Learn which employee engagement software vendors Forrester highlighted