How to Measure and Improve Employee Engagement We all know employee engagement when we experience it. It’s the customer service representative who empathetically listens and responds in meaningful ways, the boss who takes time to learn what is important to each employee and tailors their approach to working with that individual accordingly, the employee who creates an innovative response to an assignment that freshens the brand and ignites customer excitement in the product. Employee engagement is inextricably linked to increased customer satisfaction and subsequent profitability. This makes employee engagement something that differentiates one organization from another, giving the organization with engaged employees a competitive advantage. This makes employee engagement something to be cultivated, measured, shaped and honed. Best Buy used to track and monitor employee engagement and customer satisfaction separately, but recently began evaluating the two together. They posited that if employee engagement increased customer satisfaction and boosted sales, the company could allocate more resources to employee engagement initiatives. Best Buy found that higher employee engagement scores led to higher profitability. For every tenth of a point increase in employee engagement, the store saw a $100,000 increase in annual operating income, according to the September 2010 issue of the Harvard Business Review. In his bestseller, Moneyball, Michael Lewis shares how statistical analyses and measurement create the ultimate baseball team. Javier Rojas, Managing Director for Kennet Partners, describes lessons businesses can take away from this hit book and film if willing to take the time to focus and make changes. “Every industry has rules and conventions worth challenging. Google changed internet search by looking at data correlating to documents rather than at text analysis, the industry standard,” states Rojas.” Netflix figured out how to monetize the long tail of movies, rather than following Blockbuster’s mega-hits model. In your market, what’s the biggest element of waste your customers and employees face? If you could fix that problem, how big would the payoff be?” Rojas cautions that too many times organizations focus on the ‘win’ instead of looking for the ‘runs’. Statistics show that if you generate more runs, you usually generate more wins; this means that on-base percentage becomes the statistic to manage, says Rojas. Instead of delivering outcomes, organizations must focus on what moves employees forward to meet goals as well as customer needs and expectations. So, how engaged are the employees in your organization? How do you know? nbrii.com Gathering baseline information can reveal how engaged the workforce really is. Most organizations conduct surveys to gather this important information relating to employee engagement (or lack thereof) and ways in which the organization can adapt and more effectively engage employees on the job. The survey data indicates whether employee engagement is high or low. The next step is to find out why, best done by using a high level statistical analysis, such as a root cause analysis. Follow up related to the survey feedback is important to create trust in the process. The focus of the action planning process used to create improvement initiatives should be the organizational system and how it impacts employee ability to become and remain engaged; the focus should never become one of individual blame or judgment. Comparing the survey results to survey benchmarks can also be very informative in understanding how your scores compare to your industry. There are elegantly simple ways to enhance employee engagement that can be customized for your organization with the use of survey data. What is required are time, focus, attention, patience, persistence and trust. Employee engagement begins upon employment, in hiring of the right person for the right job and giving the person a realistic job preview. Providing on-the-job training or offering access to certification programs to acquire necessary knowledge and skills helps promote employees towards excellence. Timely communication and consistency in communication are important in dispelling rumors. It is widely documented that employees who feel listened to and feel comfortable expressing dissatisfaction are better able to work with others to resolve differences than those unable or not allowed to communicate. At Sun Microsystems, former CEO Scott McNealy was widely known for his interactions with employees via Sun’s Intranet, asking for and receiving feedback. Rewards or incentives help promote employee engagement. While money is not necessarily a motivating factor, recognition, awards for distinguished service or good performance, profit sharing, an extra day off, and tickets to a performing arts or sporting event can all motivate employees towards commitment at work. Activities that promote team building and a feeling of inclusion are also effective. A company picnic on work time, recreational activities, volunteering to clean up a park or the-adopt-a-stretch-of-highway can build camaraderie and a sense of belonging and accomplishment while having fun. Improvisational exercises also create a sense of esprit de corps, as employees push outside of their comfort zone with the support of their colleagues. Finally, coaching and mentoring can effectively develop leadership skills and behaviors, promoting engagement at work. The recommended approach is to conduct an employee engagement survey to establish baseline scores. Then, resurvey periodically to gauge the effectiveness of your improvement initiatives. If you would like to learn more about how NBRI can help your organization measure employee engagement, contact us now at 1-800-756-6168. Terrie Nolinske, Ph.D. Research Associate National Business Research Institute Addison, Texas nbrii.com