Employee engagement is a hot topic, for good reason. Companies have realized that replacing employees is difficult and there is a price to pay in direct and indirect costs. Direct costs include the cost of recruitment. It is the indirect costs, however, that can give managers sticker shock. When knowledge and experience walks out the door, so does production. Other employees have to pick up the slack, and morale often suffers.
Compensation has less to do with engagement than most people think. When the compensation is right, the issue disappears from the table. What is interesting is that some highly engaged workers are underpaid. Some of the most passionate people are in the non-profit sector, which is notorious for paying low wages. How can this be? There are several key factors in keeping the best and most productive employees happy and engaged.
By the Numbers
Gallup has measured employee engagement for several years. Managers can learn a great deal from the results. Gallup defines engaged workers as those who are “enthusiastic about and committed to their work and workplace.” Organizations benefit from an engaged workforce.
Gallup’s Curt Coffman describes “not engaged” workers as those stuck in neutral. “Actively disengaged” workers are toxic and actually work against business objectives. From 2013 to 2014, the findings showed minor improvement, with the percentage of engaged workers slightly rising. Yet the majority of workers fell into the not engaged or actively disengaged categories. Although both declined slightly during the same period, they still comprise 68.5 percent of employees!
Business executives should have a keen interest in:
1. Cultivating and retaining engaged workers
2. Moving “not engaged” employees into the “engaged” category
3. Identifying the “actively disengaged” so they can be turned around or moved on.
U.S. Employee Engagement, 2013 vs. 2014 (Source: Gallup)
Create an organization where employees can grow. Keep in mind that growth means different things to different people. Some want the challenge of meeting an objective. That star salesperson may be coasting. Pulling her to the side and giving her a stretch goal could inject some energy into her career. True stretch goals are difficult to reach and may not be attained. If she reaches it, great. Not making it should not be viewed as a failure; it’s a learning experience.
Other employees need to broaden their horizons. The best employees will do this on their own. Proactive employers encourage growth, which may prevent individuals from going elsewhere. This strategy can be formal or informal. One approach exposes employees to other areas of business outside of their daily responsibilities. Smaller firms can pull this off informally. Larger organizations may need to institute programs that enable employees to embark on short new assignments or sabbaticals.
Increase Access to Leadership Dynamics
One interesting finding in Gallup’s research examines what role engaged employees play in the organization. A greater percentage of managers and executives are engaged than line staff. Managers typically make more decisions and tend to have more information about the organization. What if these dynamics occurred at a staff level, encouraging collaboration and input from those employees? Leaders teach and get the best out of the people around them. If managers shared information and allowed staff to assume leadership roles, engagement levels would probably rise.
Create Opportunities for Innovation
Google is renowned for an initiative that allowed employees to spend 20 percent of their time working on projects they chose. Game-changers like Gmail and AdWords were some resulting projects. Google benefited from giving its staff freedom to explore interests they thought could add value to the company. More recently, there has been talk about Google moving away from the practice. Google evolved from its startup roots into a global giant. That means changes.
What should not change is the spirit of innovation. Not all organizations will go the route of “20 percent time.” Organizations that want to have an engaged workforce will encourage idea creation and sharing. Employees naturally have ideas. They do not need permission to generate them; they may need the freedom to pursue them.
Initiate Mentorship Programs
Mentoring is another useful approach. High-performing employees may have mentors inside and outside of the company. Two things are accomplished by formally implementing this type of program. The mentees get one-on- one time with someone from whom they can learn. The learning may be about their profession or it could relate to navigating that particular organization. It is an investment of time on both ends, but the junior person is able to see a clear path within the organization. The mentor and organization also benefit. Taking an interest in someone else’s career provides insight into the company’s talent pipeline.
Conduct Stay Interviews
More and more organizations are abandoning annual performance evaluations. They are not abandoning performance management; many replace the annual review with more frequent sessions. Another component of this approach can be the "stay interview’s Human resources professionals are great about doing exit interviews when someone leaves a job. The stay interview is something that can be conducted throughout the year to find out why someone is staying. Managers will find they have a better feel for the organizational pulse. These more- frequent conversations create an ongoing, two-way dialogue. That discussion and continuous feedback will endear high performers.
These strategies are investments in human capital and the potential return is greater engagement. Given the cost of turnover and fierce competition, organizations that can achieve above-average engagement gain a significant competitive advantage.
Gone are the days of the dreaded annual performance review. Discover how GoCo’s modern HR software can help you have better one-on-ones to keep your employees engaged and retain top talent.