CHAPTER 7

EMPLOYEE ENGAGEMENT IN ACTION

How can we differentiate our organizations from all our competitors for the talent we are recruiting? By appealing to belief-driven candidates. We define belief-driven candidates as potential hires who believe companies and brands should take a stand on important issues. In other words, they should stand for a purpose.

Purposeful engagement can make all the difference in inspiring employees and teams to do great things. One attribute that gets the attention of top talent is the chance for meaningful work with a competent supervisor for a company that has a shared purpose. Engagement and purpose are the magnets for attracting top talent to an organization.

We have seen it with our own eyes. Disengaged employees who see little or no overall purpose in their work provide a fraction of the productivity and innovation compared to those who are aligned with the enterprise. Also, disengaged employees are more likely to be actively or passively seeking other jobs. Employee engagement, loyalty, and trust reliably promote organizational efficiency and success. Many companies need to significantly improve their employee engagement building skills.

There is a problem with employee engagement. Statistics from Gallup’s 2017 State of the Global Workplace Report paint a bleak picture of corporate cultures.¹ These are the cultures that too often undermine leaders and talent managers who are responsible for creating the supportive and purposeful workplaces that make it possible to recruit and retain top talent. The following six statistics are indeed troubling.

1.   Eighty-five percent of employees worldwide are not engaged at work. Gallup’s 2017 State of the Global Workplace Report found that 85 percent of workers from around the world either are not engaged or are actively disengaged with their jobs. That’s a huge number of employees who are uninspired and, therefore, less motivated to be innovative and productive. One solution: creating thoughtful employee development plans based on each employee’s unique goals and passions.

2.   Seventeen percent of employees0 worldwide are actively disengaged. Active disengagement is more than employees not putting forth the extra effort. We are talking about workers who have basically given up and are just phoning it in. Top performers tend to leave organizations that tolerate the presence of disengaged employees. In extreme cases, disengaged employees actually sabotage the mission. Much of this disengagement is the responsibility of the organization itself and its leaders. Employees aren’t being nurtured, listened to, inspired, or appreciated.

3.   Fifty-seven percent of talent management professionals find it challenging to create engaging employee experiences in learning. Research by SilkRoad in 2018 reveals that recruiters and HR specialists find it challenging to deliver great performance in recruiting (46 percent) and onboarding (41 percent).² Attracting great talent is a continual goal, but keeping that talent can be equally challenging, which is why an enabling organizational culture remains so critical for productivity and profitability.

4.   Thirty-three percent of employees want to leave their jobs because they’re bored. When Korn Ferry surveyed nearly 5,000 professionals and asked why they were planning on looking for a new job in the subsequent year, one-third checked “I’m bored, need a new challenge.”³ Employees who feel they are stagnating may disengage or, worse, may seek better opportunities elsewhere. Improved employee development, including dynamic training programs, along with a sense of purpose, can give workers a reason to stay and be engaged.

5.   Thirty-two percent of employees who leave their jobs within 90 days do so because of company culture. Jobvite’s 2018 Job Seeker Nation Study uncovered that, amazingly, 30 percent of survey respondents have left their jobs within 90 days.⁴ Nearly a third of those new hires who bolt within three months do so because the company culture is a problem. Aside from how expensive hiring is and how costly high attrition rates can be, the most startling aspect of this stat is that it shows that new hires can tell if a company culture is toxic almost immediately. Moreover, 15 percent of respondents turned down a job offer because of an organization’s culture and reputation.

6.   Engaged employees make their organizations 17 percent more productive and 21 percent more profitable. Great business leaders have always known what Gallup’s report confirmed: engagement is beneficial not only for the employee but also for the entire organization. Taking active steps toward achieving that engagement leads to a workplace where employees feel valued, respected, and empowered to be creative. This provides two important benefits—employees feel a sense of purpose in the work they do and, in turn, that motivation inspires and encourages employees to seek out new initiatives within the organization to help it grow.

The job of leaders in the age of social good is to activate purpose. Undeniably, employee engagement matters. It affects everything critical to building a successful organization, from talent retention and career development to leadership development and workplace culture. However, the more frightening statistics we’ve highlighted, when taken seriously, can be catalysts for change, especially when a company experiences high attrition, loss of faith in leadership, and an overall lack of vision in the organization.

The Impact of Perks on Employee Engagement

Treating employees well pays off. The key is to ensure that the treatment employers offer is the treatment employees want. Tech companies, such as Apple, Google, Facebook, and Microsoft, have led the way in treating their employees to a variety of perks, ranging from free meals to onsite fitness centers. At the same time, these firms also innovated with flexible work schedules, generous vacation policies, and paid maternal and paternal leave. As these perks become normalized, other industries are slowly catching up.

Do any of these perks have a significant impact on employee engagement as measured by advantages in recruitment, retention, and employee motivation? And, if so, are the impacts limited to the United States, or can they be generalized to firms in other countries?

A new study of companies finds that treating employees well does pay off. This study, based on Thomson Reuters’s ASSET4 database, which references many aspects of workplace culture, analyzed data on employee relations and company performance on 3,500 organizations in 43 countries from 2002 to 2014.⁵ The research focused on eight dimensions that, in the aggregate, are meant to represent how well firms treat their employees. Under the study’s framework, the eight dimensions of treating employees decently are:

•   Employment quality. The study assigned a measure to the quality of a company’s benefit packages and job conditions.

•   Health and safety of the workplace.

•   Training encompassing the company’s commitment to providing development and educational opportunities for its workers.

•   Workplace diversity, which includes equal opportunities for career advancement.

•   Respect for human rights and labor laws.

•   Diversity program—74 percent of the companies had one.

•   Formal training program—62 percent provided skills training for their employees.

•   Employee health and safety initiatives—55 percent established goals based around employee health and safety.

The bottom line is clear: treating employees well pays off. Companies with a higher Employee Friendly (EF) culture score reported higher performance numbers.⁶ They tended to report better returns on both assets and equity relative to comparable firms scoring lower on the EF scale. Companies with stronger EF workplaces also reported better sales-to-assets ratios and lower expenditures. Companies high on EF reported fewer strikes. They filed more patents, a proxy for innovation.

Overall, the research is consistent with the hypothesis that treating employees well inspires higher levels of engagement, efficiency, and teamwork. “These results suggest that creating an EF culture is value-enhancing when managers make choices (including the creation of an EF culture) that are in line with shareholders’ interests,” according to research published in the Journal of Corporate Finance.⁷

Institutionalizing the Decency Code

So, what can be done? This section offers a blueprint for a program of employee engagement decencies designed to promote a culture of meaningful work and purpose designed to attract, recruit, and retain top talent.

Decencies are scalable. As decencies become more widespread—as they become something that institutions, not simply individuals, do—they tend to become perceived as more newsworthy. For that reason, it’s pretty easy to look on company websites, in printed reports, or in the media to find examples of big decencies the companies or their observers find valuable. What we find most interesting are ideas that probably started as small decencies but have morphed into something institutional. The examples below are only a small sampling of big decencies in the workplace we’ve run across that deliver on some or all of the psychological needs of employees.

•   Southwest Airlines. When it came time in 2014 for Southwest Airlines to create new uniforms for workers, instead of hiring an outside designer, the airline challenged the employees to do it. Everyone was encouraged to submit designs. Thousands of workers expressed interest. In the end, Southwest had 43 finalists. Despite having to pick one winner and leave 42 employees disappointed, the company had encouraged collaboration. Over the course of a year, selected employees met every two weeks to collaborate on the design of the new uniforms. The result? A bolder uniform as much functional as fashionable for employees. One participant called the exercise an “unforgettable experience.”

•   Ritz-Carlton. Every employee of a Ritz-Carlton hotel, from the concierge who speaks four languages to the housekeeper who cleans the rooms, has the authority, without manager involvement, to spend up to $2,000 to solve a problem with a customer. Think about it: Any Ritz-Carlton employee can spend more money than some of them earn in a month to solve a customer problem.

Of course, the Ritz-Carlton hotels invest significantly in their employees. All recruits go through tests that screen them for the attributes of the most successful Ritz employees. Ritz has learned that applicants whose test scores resemble those of its most exemplary employees tend to succeed. After employees are hired, training/coaching is constant. The result is not surprising. The Ritz-Carlton brand stands for perhaps the best hotel experience in the world. Ritz-Carlton hotels are so legendary for their reliable level of customer service that the chain received the coveted Malcolm Baldrige National Quality Award. As customers, we may see a small decency when the bellhop gives us a bottle of water so that we can have something to drink during our taxi ride, but the gesture is, in reality, an expression of a big, programmatic decency.

•   Metso Minerals. Many companies have mentoring programs. We think there is no better way to make new employees feel welcomed, comfortable, and effective from day one. Optimum results come when the mentors are volunteers, according to Dawna Smeltzer, manager of aftermarket services at Metso Minerals Industries. At her company, new employees shadow the mentor for six months after they are hired. The aim of the program is to facilitate skills transfer and to get the new employee integrated within the department and the company as effectively as possible. The company benefits in two broad ways. “First, new employees become productive much more quickly,” Smeltzer says. The mentoring also contributes to a high retention level. Employees who are frustrated or having difficulties can often go to their mentor. Metso’s turnover rate is much lower than the industry average. Second, the company benefits because the job shadowing is good for the mentor too.

•   Disney. At Walt Disney World in Orlando, Florida, one of its 180 recognition programs is called “The Spirit of Fred Award,” named for an employee named Fred. When Fred first went from an hourly to a salaried position, five people taught him the values necessary for success at Disney. This experience helped to inspire the award, and the name Fred became an acronym for Friendly, Resourceful, Enthusiastic, and Dependable. First given as a lark, the award has come to be highly coveted in the organization. There is also the Lifetime Fred Award—a bronze statuette of Mickey Mouse given to those who have won several Spirit of Fred Awards. Here, one employee’s decency is elevated to a structured program that still retains a personal touch.

•   AT&T Universal Card Services. The Jacksonville, Florida–based finance company uses the World of Thanks Award as one of more than 40 recognition and reward programs. It’s a pad of colored paper shaped like a globe with “thank you” written all over it in different languages. Anyone in the company can write a message of thanks to someone else and send it to that person. The program is extremely popular; in four years the company has used more than 130,000 such notes. That’s 130,000 small decencies rolled into one big decency program.

•   Office of Personnel Management. The United States Office of Personnel Management in Washington, DC, uses a “pass around” award that was first given to the division’s “special performer.” Later that person passed the award to another person who, he/she believed, truly deserved it. The award came to take on great value and prestige because it came from one’s peers. A recipient can keep the award as long as he or she wants, or until he or she discovers another special performer. When the award is to be passed on, a ceremony and lunch are planned.

•   Hewlett-Packard. A Hewlett-Packard company engineer burst into his manager’s office in Palo Alto, California, to announce he’d just found the solution to a problem the group had been struggling with for many weeks. His manager quickly groped around his desk for some item to acknowledge the accomplishment and ended up handing the employee a banana from his lunch with the words, “Well done. Congratulations!” (How’s that for a spontaneous, no-cost gesture of appreciation? A smaller decency there never was.) The first employee so honored was understandably puzzled, but eventually the charm of the gesture proved irresistible. The next time someone did something noteworthy, people looked around for a banana. Over time the institutionalized Golden Banana Award became one of the most prestigious honors bestowed on an inventive employee.

•   East Alabama Medical Center. East Alabama Medical Center allows employees and work groups to choose their own shifts. A hospital has to run 24 hours a day, seven days a week, including holidays, and that obligation creates an enormous scheduling burden for management. Some shifts are always more desirable than others. The Medical Center solves this problem in a unique way: Supervisors don’t impose a schedule. Instead, workers come together, figure out what shifts have to be covered, and self-select to fill them out of a sense of community. By transferring responsibility for this challenging management process to the workers who are most affected by it, workers also take ownership of the task.

•   Crate and Barrel. Crate and Barrel store managers in Houston began a program for their associates involving a “surprise hour off.” Once a week, each store manager picks a sales associate and takes his or her shift on the floor for an hour saying, “You’ve been working hard, and I appreciate it. Enjoy a paid hour off. Come back refreshed and ready to sell more.”

Decencies to Promote Employee Engagement

•   Start team meetings with appreciations. Open team meetings with five minutes of appreciations, kudos, or expressions of gratitude during which leaders and team members can acknowledge great work of their colleagues.

•   Give 100 percent when you meet. We get it. You’re busy. We’re all busy. But what signal does it send your followers when you are meeting with them while also answering your phone, checking e-mail, or responding to texts? This book is not the place to consider the supposed benefits of multitasking, but a meeting with followers is not the place to multitask.

•   Invite an employee to represent you at meetings. For example, occasionally ask a team member to represent you at a status meeting. Of course, the employee has to be empowered to speak for you within limits. The trust has to be mutual.

•   Involve employees in strategic planning. Make team members an active part of the planning process. Invite them to put their fingerprints on the future. Contributors are more likely to adopt what they help to create. Involve your team in planning ahead, assessing opportunities, and coming up with ideas to improve your business strategy. The more employees feel invested in the process, the more engaged they will be in the process. Doing so promotes transparency and offers employees strategic insight into company operations. It fosters loyalty and builds a pipeline of better-prepared managers.

•   Build in “Intrapreneurship” Events. Many talented millennials aspire to the start-up life. Organizations don’t have to lose this talent if the employees can meet their entrepreneurship needs by creating opportunities for “intrapreneurship”; that is, encouraging employees to develop new enterprises and commercially viable ideas within the company. There are good models for this. 3M encourages all its engineers to devote one day a week to their own projects. Unilever has a start-up hub to keep bright ideas generated by its employees in-house. The key is to create an environment of validation where failure is never penalized.

For example, in 2015, Rite-Solutions, a software developer, created the Mutual Fun platform. It combines social networking and gamification strategies to create a market for new innovation. Employees create personalized profiles to allow participants to discover others in the organization with similar interests and complementary strengths to work with on innovative projects. The teams then invest their intellectual capital (in the form of virtual US$10,000) into the “idea stocks” of the colleagues they would support. A leaderboard of teams is publicly posted.

•   Encourage peer-to-peer recognition programs. Companies can build recognition into their business practices by creating peer-to-peer recognition programs in which employees are provided monthly reward points that they can give away to colleagues for work-related wins. Employees who earn a certain number of points can redeem them for various perks, such as a restaurant gift card or an extra personal day. Peer-to-peer recognition can eliminate a dynamic common to many companies: the perception that some contributors were getting benefits because they were more “liked” by supervisors. One way to address this issue is to create programs in which employees are invited to nominate their peers for recognition. The companies that tried this found themselves in a better position to retain high-value client business as a direct result of more engaged customer-facing employees.

•   Involve employees in the hiring process. They don’t want to be just another check-the-box interview. Give them a vote or even a veto. Involve them in the actual decision making about who joins the team. And while you’re at it, involve them in creating the onboarding experience. Maybe it will be a self-guided onboarding exercise or other innovative solution. Set the ground rules and give them basic instructions, a list of objectives, and a time frame; for example, a 45-day plan, with some basic milestones.

•   Crowdsource the CSR. As we have seen, workers today want their employers to be part of the social justice movement. To their credit, many companies respond by making substantial charitable donations to the communities in which they operate as part of the corporate social responsibility umbrella. While that’s good, wouldn’t it be better if the beneficiaries of that philanthropy were determined not by some obscure committee but by the employees themselves? It’s easy. Ask every team member to make a pitch for their favorite charity and then have a fair process to distribute the available resources in a way that’s agreeable to the team. This process can distribute cash or gifts and can result in more employee involvement. Giving time can be more rewarding than giving money, especially for Gen Y employees, who are highly oriented toward social involvement. Commit to taking action; this is how engagement happens.

In an age of commoditization, many companies are look-alikes, virtually indistinguishable from each other in terms of salaries, benefits, and working conditions. Belief-driven candidates are rewarding companies and brands they believe in. On average, companies such as Starbucks, Ben & Jerry’s, and Dove that deliver a conspicuous purpose connection with their employees and customers are growing 30 percent faster.

Decencies and Great Places to Work

Michael C. Bush, CEO of Great Place to Work, is an expert on great companies. The trick, it turns out, is not so much in attaining greatness but in sustaining it. We asked Michael to weigh in on the imperative of decencies on the formula of great companies. This is what he reports:

As CEO of Great Place to Work, I get to hear inspiring stories of leaders and organizations every day. Many of them are about the ways people treat each other with decency, fairness, and humility as they work to create what we call a Great Place to Work For All. By that, we mean a culture that maximizes the human potential of everyone in the organization, no matter who they are or what they do.
      Our research has found that when you’ve got a Great Place to Work For All, it’s better for your business results, better for your people, and better for the world. And for organizations to make our lists of Best Workplaces—including the annual 100 Best Companies to Work For list we publish with Fortune—their employees must tell us through our Trust Index® survey that indeed their company has a consistently great culture for everyone.

Here are some highlights from the top ranking companies of the 100 Best Companies to Work For 2019 list:

Hilton Worldwide

Some of the nicest cafés at hotel giant Hilton are ones you can’t get to as a guest. They are cafés for the hotel’s own workers. Several years ago, Hilton upgraded its staff cafeterias and lounge spaces to make them as welcoming and comfortable as those visited by the hotel’s guests. This investment is part of a push by CEO Chris Nassetta and other leaders to treat employees at every level as well as Hilton treats customers. And what Hilton calls the “Hospitality For All” culture is working.

Many organizations struggle to create a workplace environment that is equally great for frontline, hourly staff as it is for executives. With 380,000 team members worldwide, Hilton stands out for a consistently positive experience for its team members—no matter their job role. Through an inclusive purpose embraced by company executives, innovative programs, and effective leadership at every level of the organization, Hilton has achieved a Great Place to Work For All.

Chris Nassetta began in the hotel industry at the bottom, working as a maintenance staffer at a Washington, DC, Holiday Inn while on summer break from college. This included the thankless work of unclogging guest room toilets. What he remembers most from those summer gigs was the way his coworkers treated him as family despite his youth and part-time status. This included a farewell party complete with a gold-painted plunger as a parting gift!

Nassetta always reminds himself of what it’s like to work on the front lines. At Hilton, he began an “immersion” program requiring Hilton execs to spend a week working in roles such as housekeeper, dishwasher, or bellhop. Nassetta himself took a turn as a maintenance team member in the Capital Hilton in Washington, DC. His coworkers there repeated the funny, warm send-off Nassetta experienced years before as a summer intern. “When I left,” he recalls, “they gave me a golden plunger.”

Wegmans Food Markets

An important way to treat employees decently is to listen to their ideas. One of the companies that does this best is grocery store chain Wegmans Food Markets. The Rochester, New York–based company consciously turns the typical organization hierarchy on its head, viewing leaders as servants in the servant-leadership model to the employees who directly serve customers. That translates into actively seeking out suggestions and new product ideas from employees stocking shelves, working cash registers, and cooking up sample meals for shoppers. Collaboration counts.

One of those meal coaches is Jody Wood. The way Wegmans listened to her has made a big difference to her, to the company, and to its customers. In 2014, Wood was seeking healthier food options for her husband. He was an insulin-dependent diabetic. His mobility had decreased to the point that he couldn’t walk up or down his driveway.

While talking to a Wegmans customer, though, Wood learned of an alternative, veggie-focused diet described in the book The End of Diabetes. That led her to discover “cauliflower rice”—a minced-up version of cauliflower that can substitute for regular rice but has only one-ninth of the carbs that the body turns into sugar.

Wood loved the stuff and suggested to her coworkers and managers that Wegmans sell it. Wegmans leaders agreed to test it. It was a hit in Wood’s Bridgewater, New Jersey, Wegmans. Soon after, the company began producing and selling cauliflower rice throughout its 100 or so stores. Cauliflower rice proved to be a godsend to Wood’s husband. Thanks to a low-starch diet, he now walks two to four miles a day. The product also doubled sales of cauliflower at Wegmans, keeping it on the cutting edge of healthy foods.

At one point, company chairman Danny Wegman visited Wood’s cook station. She told him her story, including how the book had inspired her. The next day he had Wood’s manager put The End of Diabetes next to her cook station. Wood now touts the diabetic-friendly diet to customers. “It changes people’s lives for the better, and they become healthier and happier,” she says. “There’s nothing worse than not feeling good. And there’s nothing better than being healthy.”

Workday

People of different generations have different priorities and needs, which creates challenges for a company trying to treat all their people with decency. One of the companies that best manages the complexity of a multigenerational workforce is business software company Workday.

The company has anchored its culture in research on generational differences, says Greg Pryor, Workday’s senior vice president and “People and Performance Evangelist.” Pryor says Workday accounts for millennials’ “psychological narrative” that they must constantly expand their skills and social ties or they might lose their competitiveness and fail in life. The company also takes note of Gen Y’s “gameful mindset” of seeking to acquire experiences so they can “level up” to the next opportunity, as they might in a video game.

These principles served as a backdrop to Workday’s performance review process, Pryor says, which was rolled out in 2018. Called “Performance Enablement,” it is less an annual, backward-looking ritual than a mechanism for giving continuous feedback and arranging “career sprints” of a few months at a time that lead to new skills and relationships.

“This generation is collecting—almost like you would collect in a backpack—different capabilities, different connections,” Pryor says. “Capabilities are the new career currency given the mindset and narrative of millennials.” All this work on millennials is paying off for Workday. Fully 96 percent of millennial employees at Workday say it is a great place to work, according to 100 Best Companies to Work For employee survey.

This progress has come from sometimes-hard conversations. Pryor recalls explaining how not getting frequent feedback amounts to a threat to millennials and how his comment prompted a revealing exchange. “One of our senior leaders, a Gen Xer, said, ‘If I don’t get feedback, that’s a good thing. If I get feedback, you’re telling me to get ready to get laid off.’ That’s the narrative from that generation,” Pryor says. “This woman, who happened to be about 24 or 25, who was on our team raised her hand. She said, ‘I just left a job because I didn’t get feedback. Because I thought they didn’t care about me.’ ”

The Trade Desk

Sometimes the best way to treat people with decency is to remove people who don’t treat others decently.

We see this at the best workplaces. They care so much about creating a great environment for everyone that they will let go of employees who disrespect others, even if the person mistreating peers or subordinates is a top performer in other respects. Consider this story we heard from Jeff Green, CEO and founder of advertising technology firm The Trade Desk.

Green had an operations executive whose performance was excellent. But members of her team of roughly a dozen people began complaining. It took Green some time to figure out whether the leader was just holding them to a high standard or if she was treating them poorly. It was the latter, he concluded. He also determined that the problem wasn’t curable. So even though the exec was getting some of the best results in the entire business and was someone he cared about, Green asked her to leave his 906-person Ventura, California–based company.

“It was one of the toughest conversations I’ve had,” Green recalled. But he also said the short-term pain of losing a top performer he liked was worth the long-term gain of replacing her with a leader who could allow the company to grow. “It’s critical to the culture, but it’s also critical to the ongoing business,” Green said. “I needed her to be a manager of over 30 people if she were here today. There’s no way that can exist with the caliber of people we want on the team if she treats them like that.”

The decision reflected Green’s vision of the company as family. Even as his global team works to apply cutting-edge data science and stock trading principles to the digital advertising market, Green believes in an old-fashioned notion of an organization as a close-knit unit. “We’re building something of a home,” he said. “This is where we live. And this is where we want to be for a long time.”

Engaging Millennial Workers

A word about millennials. Some people have suggested that millennial workers are engaged by a unique set of drivers. Our experience is that any worker, by and large, resonates to similar themes of decency-inspired engagement. Countless studies have considered why millennials are so different and why that difference makes them so unhappy at work.⁸ We believe that the similarities between millennials and say, Gen X workers overwhelm the differences. Both demographics want to show up at work in their full selves and contribute to a mission that gives them meaning.

That said, it’s worthwhile for leaders to consider the differences in what drives millennials to excel. Beyond that, we suggest it’s more effective for leaders to celebrate the unique gifts of millennials and to be open to transforming the workplace to accommodate their interests in diversity and inclusion. This is a much better approach than trying to interpret generational differences and changing millennials to fit into established structures.

It would be the ultimate understatement to suggest that over the past 15 to 20 years, a lot has been spoken, written, lectured, and debated about the multigenerational workforce in the broader context of workplace diversity. Are millennials really that different from the generations before them? Yes and no. Is this an ageist rhetoric that’s hurting your organization? Absolutely.

As noted by Greg Hammill, director of student programs at Fairleigh Dickinson University Silberman College of Business, “This is the first time in America’s history that we have four different generations working side-by-side in the workplace. To begin to understand how individuals from different generations act and react, one must first start with understanding oneself. Begin by seeing where you fall on the generation timeline. This timeline represents a conglomeration of many views, starting and ending dates. Birth years of the generations are subjective, not scientific or agreed-on time spans. This subjectivity poses no real problem since the variation of years is not significant enough to impact the big picture of a generation’s description. The first thing to consider is the individual and his or her underlying values or personal lifestyle characteristics.”

A different insight comes from Peter Capelli of the Wharton School, University of Pennsylvania: “The problem older applicants often face is that younger supervisors don’t want to hire them because they may not know how to manage them.”

Just to review, today’s employees are loosely seen as falling into these broad groups:

•   Boomers (born 1946–1964), like the older veterans, value hard work and are often self-defined by work; they are success-oriented, title-focused, less likely to job-hop.

•   Generation Xers (born 1965–1980) tend to be more self-reliant, less loyal, more tech-savvy, concerned with work-life balance, intrapreneurial, resourceful.

•   Millennials (born 1980–2000) are most concerned about personal fulfillment (meaningful work), professional and career development, corporate responsibility, ethical leadership, teams, remote work options, multitasking, tech tools, recognition.

•   Generation Z (born 2000+) are extremely tech-savvy, ambitious, culture-focused, team-oriented, entrepreneurial, creative.

The Case for Millennials and Gen Zs

The dismal statistics on employee engagement that we presented in Chapter 2 are even more pronounced among millennials who are increasingly taking over the workplace. Millennials are on pace to account for 75 percent of the US labor market by 2025. Millennials are tech-savvy, adaptable, and passionate about making a difference. They enter the workforce with enthusiasm as well as a unique set of expectations. Rarely, so far, are today’s corporations equal to the task of living up to those expectations. The consequences are not pretty.

America’s senior executives, most of whom are baby boomers nearing retirement, often chafe at the work habits of millennials. Stereotypes such as entitled, disloyal, lazy, impatient, and snowflake are thrown around. Some executives believe it is the job of their organizations to train millennials to fit into their longstanding organizational traditions and cultures. We believe that is an effort doomed to failure. The better approach is to find creative ways to leverage the unique priorities, perspectives, and purposes that energize millennials to transform the company’s culture for the better. In the process, leaders will experience innovation, drive engagement, and cultivate the next generation of leaders.

Call it the loyalty challenge. Millennials, it is true, can tend to express limited loyalty to their current employers, although they often have great loyalty to their teammates and the common goal. It is also true that many are just one disappointment at work away from quitting. Many millennials are entrepreneurial. According to the 2016 Deloitte Millennial Survey, in any given year, one in four millennials are preparing to quit to join a start-up.⁹ That figure increases to 44 percent when the time frame is expanded to two years. Only 16 percent of millennials see themselves with their current employers for as much as a decade. The study surveyed 4,300 millennials in more than 10 countries.

When they quit, it’s often because they are disappointed. The disappointments often flow from insufficient alignment between the social values a company claims to have and the values it actually practices. Millennials insist that companies not only talk but also walk their values. Millennials often put their personal values ahead of organizational goals, and it’s quite common to see them reject employers and assignments that conflict with their beliefs.

What Do Millennials Want?

What is it, exactly, that millennials want? The Millennial Impact Report, a recent study by Achieve Consulting, suggests some of the workplace behaviors that millennials exhibit.¹⁰ Mostly, millennials want an opportunity to do work on their terms, be productive, have good supervision, and have the opportunity to make a difference in the world. Let’s look at specifics. While all employees want some of these elements, millennials tend to rank some workplace dynamics higher than previous generations.

•   Teamwork above all. Millennials prefer to work in teams with a constant state of collaboration. It’s all about capturing and fueling a millennial behavior of team over individual to drive success.

•   Quality supervision. Millennials often rank quality time with their manager at the top of the list of things they want in a workplace. Millennials want to see individualized focus and attention on their personal career path. They also want their manager to be an advocate for them in alleviating any workplace issues or concerns. Having regular one-on-one time with managers is key. Millennials want to feel they are being coached. They want mentors. They want to feel that their managers are their champions and that their individual interests are as important to their managers as the interests of the organization.

•   Flexible work arrangements. Millennial employees look for flexibility. One proxy for that is the opportunity to work from anywhere. While millennials welcome collaboration, they also understand that every job requires some heads-down time. When they need to focus, millennials want to be able to choose where to work. Millennials tend to chafe at restrictions such as fixed hours, sick days, vacations, etc. They want to be accountable for getting the work done, not monitored for how and when they work.

•   To be part of the decision. If they don’t know the why, millennials find it hard to stay engaged. “Because I said so” is never acceptable. This need to know the “why” behind everything makes millennials good employees but can also be extremely frustrating for managers. It’s easy for boomer supervisors to suspect millennials of resistance to their authority or insubordination. Millennials want the big picture, the 10,000-foot view of everything. If managers keep millennials in the loop on the entire scope of any project they may be working on, the organization will benefit from highly productive workers instilled with a global business mindset.

•   Focus on career development. For millennials, career progression is dominant. Failure to put in place programs to develop the careers of millennials will cause them to leave. In fact, 71 percent of millennials say they’re likely to leave their company within two years. The only way to arrest such turnover is to offer enriching career development opportunities. There is no other way. Throwing money at the individuals by itself won’t solve the problem. This is the talent with the most options.

Millennials vote with their feet. It’s a truism in the HR profession that employees don’t leave their jobs, they leave their managers. Unfortunately, too many millennials are justified in concluding that their skills aren’t being developed by their managers. About a quarter of millennials say that senior managers are the greatest barrier to innovation. Taken together, many millennials feel traditional command-and-control leadership structures are holding them back.

If millennials stay engaged, it’s because they see concrete evidence that their managers are rooting for them and the organization is structured for their growth. The solution must be a career development plan that is tailored and specific to the interests and passions of every contributor. Does this require extra effort from HR, the managers, and the entire organization? Of course. No two conversations will be the same. But that’s appropriate because no two contributors are the same. It’s nevertheless critical for managers to continue to open up these conversations with employees so that workers feel invested in and valued, which will inevitably lead to higher engagement. The investment has handsome payoffs in terms of innovation and breakthrough performance. Business leaders are in the driver’s seat to foster this process to increase engagement.

•   Fast career progression. The stereotypical complaint with millennials is that they are impatient. Maybe. It’s not unusual for millennials to welcome lateral career moves in pursuit of career satisfaction. Money is not as much of a motivator for millennials as many managers might think. A recent study by Cornerstone OnDemand found that the biggest motivator for changing positions is the promise of purpose and fulfillment, not money.¹¹ Millennials are impatient with timetables and paying dues. Millennials also want real-time, specific feedback. In return, they are eager to learn new skills and will work hard to become even more valuable to the company. On the other hand, millennials value mobility. If they are not satisfied, they are quick to quit. A 2015 study by the Education Advisory Board suggests that millennials will job hop up to 20 times in their career, about twice as many times as their baby boomer counterparts.¹²

•   Continuous feedback. All employees want feedback about their performance. Millennials demand it. It’s a form of psychic income. How appropriate, then, that the word “feedback” starts with the word “feed.” Without feedback not only from managers but also from teammates and even the customers they serve, millennials feel malnourished. The lack of lively and timely feedback impoverishes employees. Millennials are content to spend 40, 50, or even more hours at work, dedicating their energies to the enterprise. Getting feedback on their efforts is not much to ask. Yet as study after study shows, most employees want more specific and timely feedback than the organization is prepared to offer.¹³ Managers say they have no time. But they have time to make excuses. The reality is that it is sometimes uncomfortable to offer specific feedback and, to be fair, some employees resist receiving it. But managing is what managers get paid to do. Withholding feedback can lead to stunted growth, lack of clarity, loss of talent, missed opportunities, and, of course, disengagement.

•   Recognize and appreciate. Employee engagement isn’t about what your employees can do for you, but what you can do for your employees to motivate them. Beyond conversations and programs about career development comes continual recognition and appreciation of individual and team efforts. We know that informal peer recognition is often as important as formal recognition. While cash awards are appropriate, millennials also value symbolic rewards that capture the passion of the effort. Millennials often value experiences, such as a company-paid holiday, over awards of cash.

•   Fixing problems, not symptoms. Millennials resist projects that look like applying Band-Aids to problems. They want to bite into the problem itself, not waste time on fixing symptoms. Millennials want to feel valued, and the best way to express that value is by giving them a crack at solving real problems.

•   A social work environment. Many millennials look for a social environment at work. On one level, they value office activities and socializing where they can get to know their coworkers better. On another, they want to have an impact on the world and for the company to support specific values around issues such as social justice, inclusivity, and environmental sustainability. Millennials value volunteer days where the whole office gets together and spends time outside of the office in the service of some social good.

The leader’s challenge: to be agile enough to lead a culture where half of the employees believe in bosses and budgets and half believe in visions and values!