8:30 AM Monday January 3, 2011
One of the primary definitions of the word "engagement" is "a hostile encounter; a battle." Another is "a specific, often limited period of employment."
In the corporate world, however, engagement has come to signify just the opposite: some blend of an employee's commitment, passion, focus, motivation, morale and job satisfaction.
It's what every company wants, but few get.
Even in the absence of a fixed definition, more than 100 studies have now demonstrated a strong relationship between employee engagement and organizational performance. For example, a Towers Perrin study conducted in 2007-2008 among 90,000 employees in 18 countries found that companies with the most engaged employees had a 19 percent increase in operating income during the previous year, while those with the lowest levels had a 32 percent decline.
The study also found that only 20 percent of all employees were fully engaged. Forty percent are "enrolled," meaning capable but not fully committed, and 40 percent were disenchanted and disengaged. That's consistent with a number of other studies, including Gallup's.
So what most influences employee engagement?
In our work with several dozen Fortune 500 companies, we've come to believe the holy grail is the degree to which employers actively invest in meeting the multidimensional needs of their employees. Above all else, that's what frees, fuels and inspires people to bring the best of themselves to work every day.
Human beings share four core needs beyond survival: sustainability (physical); security (emotional); self-expression (mental), and significance (spiritual). Amazingly few companies focus on meeting any of these needs.
The primary value most employers offer employees is money. Too often, it's barely enough to survive. Five million Americans earn the minimum wage of $7.25 an hour. For a 40 hour work week, that comes out to $15,080 a year. The poverty line in the U.S. is $22,050 for a family of four.
But even paying employees far higher salaries is no guarantee they'll be engaged so long as their other needs aren't met.
Our most basic needs, beyond survival, are in the physical domain. Among the companies with whom we've worked, Google does far and away the best job of investing in the health and well-being of their employees. Google provides them terrific food at no cost, fully equipped gyms, low-cost massages, napping pods, and on-site medical care.
How crazy is it that companies are willing to invest in preventative maintenance on fixed assets such as their machinery, but typically won't make a comparable investment to enhance and sustain the health and well-being of their employees?
The second core need all of us share is to feel emotionally secure — meaning valued, recognized, and appreciated. Less than 40 percent of employees worldwide feel their managers are genuinely interested in their well-being. Only one out of ten employees feel they're treated as vital corporate assets.
The more our values feel at risk, the more we become preoccupied with defending and restoring them, and the less energy we have left to generate value for our companies.
The vast majority of employers fail to recognize a simple and immutable truth: how people feel at any given moment profoundly influences how they perform.
Think about how you feel when you're performing at your best. Nearly all the adjectives most of us think of — happy, positive, confident, optimistic — reflect a high quantity and a high quality of energy. Leaders ought to be evaluated, in large part, on the degree to which they evoke those feelings in those they lead.
Our third core need is for self-expression — the opportunity to use our unique skills and talents and to figure out for ourselves how best to get our work accomplished. Instead, most employers tell their employees when to come to work, when to leave, and how they're expected to work. It's a parent-child dynamic.
Treated like children, many employees unconsciously adopt the role to which
they've been consigned. Feeling disempowered, they lose the confidence and the will to take real initiative or to think independently.
Empower and trust employees to get their work done, and what you're likely to get back is appreciation, higher motivation and greater commitment. If you're a leader, why wouldn't you measure your employees by the value they generate, rather than by the number of hours they work, or how they choose to get it done?
That's the mission of Cali Ressler and Jody Thomson, the two women who created the Results Only Work Environment (ROWE), in which employees design their own work days and are evaluated solely on their results. Ressler and Thomson instituted it first at the home office of Best Buy, their own former employer and they've since brought it to Gap Outlet, and several other companies with impressive results.
The fourth and final core human need is for significance. Once our survival needs are met, most of us long to feel that what we're doing truly matters.
Most large companies today have a lofty mission and vision statement, and an equally noble set of core values. But what gets written on a piece of paper counts for very little. What really inspires us are leaders who visibly, palpably, credibly and consistently stand for something beyond profit, and who give us the opportunity to get behind a meaningful mission.
That doesn't require that a company be in the business of curing cancer or solving global warming (although that certainly helps). Zappos is an example of a company that began with something as prosaic as selling shoes on line. But through a combination of a fierce commitment to great customer service, and to treating its own employees equally well, CEO Tony Hsieh and his team have created a company with a powerful sense of mission and high level of employee passion and loyalty.
Mark these words: The companies that make a paradigm shift from seeking to get more out of their people, to investing instead in meeting their core needs, will build huge competitive advantage in the demanding years ahead.
http://blogs.hbr.org/schwartz/2011/01/what-it-takes-to-be-a-great-em.html
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victor aberdeen 1 week ago
Excellent article, it should be mandatory for all in management positions to view their staff as whole people to be treated with honor and respect.
However, this seems too much of a game change for most. I recall Rod Canion (CEO & co-founder Compaq) presenting that he was the least important person in the company, inverting the org chart he placed the customer at the top followed by every person who interacted daily with the customer. While that philosophy ran the company grew.
But many in management are driven by impatient greed extracting as much from the organisation as they can to the point that the C level payroll is damaging the growth potential of the business. In the UK the John Lewis Partnership reversed the idea in the 1920's when the owner decided to create an employee partnership, which teis the CEO's salary to the salary of the lowest paid employee. The founder, was voted out by his staff, now when you shop in their stores you know the kid behind the counter is the owner and it shows in the way they treat you, empowerment with substance.
What you describe is so simple, to treat people with respect and expect (as a manager) to earn the respect of your staff. To take the time to ensure each person has what they need to do their job, including the support of their manager and peers. To focus on what each person needs to deliver to make the business a success and remember that they have a life elsewhere that is more important to them than work. Yet when they know you respect their private life, there will not be a shortfall because they respect their responsibility too. Mutual respect, egoless team work where each individual's failings are covered by the team as a whole to drive greater success than any regular management methodology of carrot and stick.
Jim Collins calls it Level 5 and in this current climate we need more level 5 management not less!
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Jim Bearden 1 week ago
Tony,
Thanks for this excellent article. Many of the same organizations that behave as if money is the only thing that matters to their employees will quickly correct their own salespeople who lose business to lower-price competitors. We all know that money (their compensation package) is important to employees, just as price is an important factor to our prospects & customers. However, money & price are not the only factors that are important to those people. Here's the way I describe the phenomenon about which you've written so well: Each of our employees has his/her own, somewhat unique Definition of Value, and those definitions change. Effective leaders understand that the only reason employees will become and remain engaged is if they believe they will receive sufficient value to justify their doing so. So instead of relying on false assumptions, e.g., money is all they care about, they work to understand--and regularly update their understandings of--their employees' Definitions of Value. Here's a question bosses might consider asking, "What are some of the things that you want back in return for the things you're asked to do?" And one more thing, they'll probably have to ask more than once in order to convince employees that they really care. Thanks again for this very insightful article.
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Bob Ebers 1 day ago
Hello Tony, informative blog entry, thanks. With our clients we're using the multidisciplinary research on motivation defined by Paul R. Lawrence and Nitin Nohria both from Harvard who define the 4 drives to acquire, bond, learn and defend.
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Levi Smith 3 days ago
Appreciate the thoughts. I enjoyed reading the book by Cali Ressler and Jody Thomson as well as Tony Hsieh. We have a strategic objective at the company I'm CEO of, The Karis Group, to be a great employer. I believe it will be increasingly difficult for companies to be competitive without cultivating an exceptional culture that attracts and retains the very best people.
http://www.itsworthnoting.com
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Marcella Bremer 5 days ago
Agree completely and this is totally recognizable from our database gathering results of the Organizational Culture Assessment Instrument. Simply put, the results show that people want more appreciation (Clan Culture) and professional autonomy (Adhocracy Culture) and much, much less control and stability (Market and Hierarchy Cultures in OCAI methodoloy).
The paradigm shift is also visible in “working 2.0”: executives have to manage employees on added value instead of clock hours and control when staff is not always at work in their cubicle but from home. People are done with the old, industrial-era management…!
I also like the child-parent remark. This is exactly what I mention in my blog about Undercover Boss and Employee Engagement, please read http://www.ocai-online.com/blo...
An interesting question remains: are there any substantial differences between USA and Northern Europe’s workplace cultures? The cliche wants the USA-corporations to work more top-down while in the Netherlands for instance, employees enjoy more democratic rights and can have a say about their work, the company’s strategy and so on.
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Lodi Planting 6 days ago
Tony - great post, but nothing new!
All this information is known for a decade. Unfortunately not a lot of organizations (at least in Belgium) preach this simple rules. Therefore I think it is good that we do some repetion once in a while.
Kind regards, Lodi Planting (Belgium)
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Rick Yvanovich 1 week ago
Great article. I just read a report from EIU about re-engagement and the disconnect that exists would be good fuel to everyone making comments and likely too for a follow on article.
http://www.businessresearch.ei...
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Jesse Lyn Stoner 1 week ago
Great article, Tony. I like your approach in showing how leaders that engage the hearts and minds of their people are meeting higher level human needs. Maslow first described his hierarchy of needs in 1943. He believed that until the lower level needs are met, an individual will not desire a higher level. This seems to hold true in extreme circumstances - when someone is starving, they are usually not interested in self-actualization. But it does not hold true in all cases. Consider Victor Frankl's amazing description in his book "Man's Search for Meaning" about his time in a concentration camp. He describes how caring deeply about something was what kept him and others alive. A less extreme example is one we all know: we know that many people will take a lower paying job in order to work in an organization they are excited about. So why do we continue to treat employees from a transactional mentality? I find it amazing that so many organizations have vision statements posted on their websites, and yet these statements do not describe the life in the organization and are not used to guide decision-making. A real vision is lived not framed. I agree with you wholeheartedly when you say, "What really inspires us are leaders who visibly, palpably, credibly and consistently stand for something beyond profit, and who give us the opportunity to get behind a meaningful mission." People believe what they actually see, not what you tell them they they are seeing.
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Jesse Lyn Stoner 1 week ago
My computer froze. See my real comment below.
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Keith Lawrence 1 week ago
Tony-
You are spot on in your obersvations and the fundamental premise. To support it let me share the experience Procter & Gamble has had in building high performance work systems in its manufacturing operations. The company has now over four decades of results in creating organizations that fundamentally respect their employees and invest in their success. The plants that have been successful in doing this universally delivered 30-40% better bottom line results than more traditional work systems that viewed their employees as an extension of the machines. They were also by far better places to work. Sustaining these organizations over time however does require strong leadership to prevent taking 'short cuts' (cutting staff, training, etc.) when times get tough.
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Shoba Shanker 1 week ago
Hi Tony,
Thanks for the good read. The question isn't if companies are aware that, money isn't the only employee motivation. But, the question here is, how many companies are willing to make that paradigm shift?
I hope your article is read by all those decision makers. :-)
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Arindam Guha 1 week ago
It's a delicate balance between "harvesting" employee output and "investing" in employee needs.
http://www.linkedin.com/in/ari...
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Emmanuel Robitaille 1 week ago
Excellent article Tony. The last phrase is so true. Hope Leaders in different enterprises and fields will read your text. Thanks
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Jo 1 week ago
Your link to the poverty line data goes to the minimum wage link...please fix.
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Epeebles 1 week ago in reply to Jo
Thanks for the heads up. It should be fixed.
Ellen, HBR ed
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