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DID YOU JUST GET YOUR EMPLOYEE ENGAGEMENT SCORE?
Permit me to try some assumptions regarding why you bought this book:
1. Your company recently administered an employee engagement survey.
2. An executive forwarded your department’s results to you.
3. You’ve been asked to submit an improvement plan to raise your score.
4. You have a deadline of 30 days or so to submit your plan.
If this sounds familiar, you just joined legions of managers across the U.S. and the world who face a question with no easy answer: How do I raise my employee engagement score? What is the magic, the secret sauce, I can put in my plan that will move my score north when we survey again?
“When we survey again” is part of the problem. Most organizations survey their employees infrequently, at least a year apart, which means raising your score is like eating soup with a fork. Employees come and go, performance issues creep into a few relationships, and your own attention to score-raising becomes contaminated by other, more pressing concerns.
And what does “more pressing concerns” mean? That your executives shift from expecting you to improve engagement to demanding performance on other metrics, the standard ones that they know impact company results more directly. So for survival, you scrap your engagement plan to focus on ongoing priorities instead. Your engagement plan is now in the rearview mirror with a short shelf life.
Besides, you’ve done this employee engagement report drill for years. How many managers have you seen get fired for getting low scores a second time? Or a third, fourth, or fifth time? Has your manager ever talked about this during your performance review? Has your pay ever been clipped or your bonus impacted by these results?
For most managers, raising employee engagement scores is a short-term project. The two reasons for this are (1) executives take their collective feet off the gas soon after plans are submitted so managers feel no compulsion to continuously implement their plans, and (2) managers, in this case you, fail to see the power that improving engagement brings to your success in the core parts of your job— both now and for your decades-long career. In other words, the engagement survey score is seen as just another score.
So let’s move forward with this mantra: Raising your employee engagement score, and hence your employees’ levels of engagement, is good for you—regardless of whether your executives make a big deal about it or not.
How do we know this is true? Many highly respected organizations have studied employee engagement’s impact on a plethora of business metrics. While each of these organizations define engagement with different words, let’s agree that for us engagement means the following: Employees are fully committed each day to giving their all to help their organizations succeed.1
Or said another way, engagement is about an employee’s total, complete effort—the best that person can bring, daily. Engagement is not about employees performing consistently at the highest level, but it is about them trying to. It is about their very best intentions to help the employer who pays them.
How Much Money Is Engagement Worth?
For most companies and their managers, engagement is a survey score and nothing more. We intuitively know higher scores are better, or at least we are told that is true. But how much better is a higher score?
Let’s start with data from Gallup, which found astonishing differences between organizations that scored in the top 25 percent and the bottom 25 percent of employee engagement. The more engaged organizations showed these improvements:
22 percent in profitability
21 percent in productivity
10 percent in customer ratings
41 percent in quality defects
48 percent in safety incidents
41 percent in patient safety incidents
37 percent in absenteeism
28 percent in shrinkage2
Additionally, turnover was lower by 65 percent in what Gallup classified as low-turnover organizations and by 25 percent in highturnover organizations. And Gallup tells us these correlations are highly consistent across different organizations from diverse industries and regions of the world.
How does this translate to the bottom line? Organizations with an average of 9.3 engaged employees for each 1 actively disengaged employee—the lowest on Gallup’s 3-point scale—experienced 147 percent higher earnings per share, or EPS, compared with their competition. In contrast, those with an average of 2.6 engaged employees for every 1 actively disengaged employee experienced 2 percent lower EPS compared to their competition during that same period.3
Other highly reputable surveys report outcomes in the same direction. Hewitt studied engagement’s impact on shareholder returns and found:
When 60 to 70 percent of employees were engaged, average total shareholder return was 24.2 percent.
But when only 49 to 60 percent of employees were engaged, returns fell to 9.1 percent.
And companies with 25 percent or fewer engaged employees reported negative shareholder returns.4
Towers Perrin found a positive relationship between engagement and sales growth, lower cost of goods sold, customer focus, and reduced turnover.5
Kenexa studied a broad range of organizations and found those in the top quartile for engagement achieved twice the annual net income of those in the bottom quartile. Similarly, WorkUSA and Watson Wyatt found companies with highly engaged employees earn 26 percent more revenue per employee. And there are dozens of similar studies that all conclude the same thing: that high employee engagement drives all other important business metrics.6
A Northwestern University study brings engagement’s power into clear focus on the local, department level: Researchers found that when salespeople give just 10 percent more effort, customers tend to spend 22.7 percent more.7 That’s a lot of bucks.
So your mission is to raise your engagement survey score and more. Your colleagues might see lifting their scores as the end goal, as just another number they have to meet in the big picture of their job performance. Any recognition for their effort requires the unlikely scenario that their managers compare year-to-year scores with even a small degree of accountability. But you now know an increased score means much more than that—it is an indicator of spiked productivity in the department you manage. And you know that score represents a thumbs-up not only for your current performance, but also for your total career.
How Tall Is Your Challenge?
Until today, raising employee engagement has been a bad bet. The data behind this is again from Gallup, telling us that for the past 15 years, engagement in the U.S. has hardly budged.8 Deloitte rubbed salt in the wound by reporting employee engagement solutions are a “fast-growing, $1.53 billion market.”9
How, you ask, can we consistently spend so much money for no results? While we know little about the composition of this vast amount of money, I suspect the top four cost categories are engagement surveys, exit surveys, and then more engagement surveys and more exit surveys. We’ve all followed the leader to hire vendors to give us data but fumbled an important distinction: Surveys provide data, but they don’t provide solutions.
Instead, you must be the solution, as you will see next.