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| Author: Dwight Lacey |
You know an idea or business construct has become mainstream when you get detractors taking pot shots at it.
In recent months, I have
come across several criticisms of employee engagement surveys. In this post, I
will address those criticisms, giving you the insight you need to judge for
yourself whether employee engagement is valid.
7 COMMON
OBJECTIONS TO EMPLOYEE ENGAGEMENT
1. Causation Is Not Established for Employee Engagement,
Only Correlation
This is an interesting
argument that deserves a response.
There are many areas in
our lives where we depend on correlation without being able to prove cause and
effect.
As a purely academic
exercise, it is interesting to speculate about causation and the ‘lack of
proof’ with employee engagement. However, as a former CEO I would suggest that
if you take a certain action and thereby get a predictable result, the
practical application is what really matters. The savvy business-person is less
concerned about the academic argument and more with the tangible outcome of the
action – especially if it helps gain an advantage over competitors.
Employee engagement is
proven to be positively correlated with lower turnover, fewer workplace
accidents, higher productivity, and so on.
In some rare cases (see
The Conference Board’s review of Employee Engagement), outliers do occur. Some
highly engaged firms do have lower profitability than their peer group. Some
disengaged companies do outperform their peers. However, they are outliers.
So in my world, if it
walks like a duck and quacks like a duck, it is likely a duck. Employee
engagement pays on the bottom line. If you aren't measuring engagement or
taking action to engage your employees, you are ignoring a simple,
cost-effective way to outrun your competitors.
2. Employee Engagement Surveys Can Become a "Gaming" Opportunity within Companies
I do not know of a
single type of profile tool, personality assessment tool, or survey that (if
the culture is a bad culture) cannot be "gamed". I have watched this
in action with 360 reviews, including tools like DISC, Myers Briggs, and so on.
In reality, if you are
doing a survey only to get the numbers at the end of the exercise, and you are
not putting in place corrective actions, training, and processes to make your
company the best place to work, you will not be successful.
It’s like what Winston
Churchill said about democracy. "Democracy is fundamentally flawed, I just
don't know of a better alternative.”
3. Issues with Linking Employee Engagement to Compensation
Like most tools designed
to create a high performance culture, the moment when you link them to a
person's bonus, merit pay, or stock options, you are opening your company up to
a potential issue. Evidence suggests that compensation is not linked to employee
engagement.
These tools are best
used to improve processes and to help leaders set personal development goals. I
highly recommend keeping the employee engagement score out of compensation
discussions. We have too many examples of compensation elements leading to
improper results and potential abuses.
4. Employee Engagement Surveys Become a Useless Tool after
4 or 5 Years
This has the potential
to happen, unless the company takes a very serious approach to building an
engaged culture AND to doing random sample tracking between surveys.
If you are not taking
action on the surveys, they can become a useless tool. Share the results with
employees. Include them in the solution. Take action on what you find out!
Otherwise, why are you doing a survey?
If you use an employee
engagement survey properly, you avoid the risk of it becoming a stale tool in
the performance management process.
5. Employee Engagement Actions Are Taking Too Long to Roll
Out after the Survey
I truly believe you need
to take the time to roll out the results – but focus on the things that will
have the biggest impact. The key is having a sense of urgency about putting the
right corrective actions in place within a reasonable time frame.
You also need to budget
time for consulting with employees about the issues and actions needed, prior
to implementation.
Don’t expect everything
right now, and don’t try to do too much all at once.
6. Hooked on a Rating
I see many comments
about companies being ‘hooked’ on being a “Top 50 Employer”, or a “Great Place
to Work”.
While these are nice
goals to have, the key is to implement a survey that truly works for your
organization. You need a survey provider that will work with your organization
to get results.
A ranking is only as
good as the companies you are being compared to. What is important is looking
at what will make you a winner in your market (more on this in the next point).
7. Employee Engagement Surveys Don’t Provide External
Benchmarking
Many suppliers and
companies want to have external benchmarking as part of the process.
I have spoken to many
people who would disagree with this idea. Like them, I believe that the key is
to find out where you are, take action to get better, and then measure again to
determine your own progress.
If I go to my doctor and
get a physical, do I want to be compared to the healthiest person in the world
or do I want to know what I need to do to improve my health.
WHY YOU
SHOULD ENGAGE YOUR EMPLOYEES
Measuring engagement is
the first step to recognizing that the biggest asset you have are your people.
When I look at an
SG&A in a company’s income statement, it is extremely rare to see the cost
of salaries and benefits as less than 40% of all non-product expenses (e.g. raw
materials in manufacturing, cost of goods sold in retail, etc.).
Looking at this cost as
a lease for an asset would put these costs in perspective. Our expectation when
hiring a person is that we will have them with us for many years. Any reasonable
cap rate on that dollar amount would show them to be the single largest asset
the company has.
Employee engagement is
not a panacea, but I would suggest to readers that it may be the most important
strategic move you can make.
Why? Because in my experience,
most companies are only paying lip service to the process. They measure to
satisfy the Board of Directors; they measure because HR says it is the right
thing to do.
As a former CEO, I want
competitors like that! As I work to make my company the best place to work, I
will drive out the people who don't buy in to our vision and values, and I will
attract the best people in the industry. While I’m doing that, the "bad
apples" will find work with my competitors.
Just like great sports
teams, a strategy is useless without a committed team to execute on that
strategy.
What’s your take on employee engagement?
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