Brad Markis, Product Manager, McLean & Company

McLean & Company 1

© 2015 McLean & Company

All Rights Reserved

Toward a New Employee Engagement Paradigm

McLean & Company 2

Agenda

5 Minutes Introduction to Engagement 3.0

10 Minutes Group Exercise

20 Minutes Engagement 3.0 in-depth exploration

10 Minutes Q&A Period

10 Minutes Swaying Neutrals & Resistant Stakeholders

McLean & Company 3

Introduction to Engagement 3.0 – 5 Minutes

McLean & Company 4 © 2015 McLean & Company

All Rights Reserved

Contributors

We interviewed and worked with over 200 firms to produce this research. The

cohort below was the most dedicated and determined to help contribute ideas

and insights to defining “Engagement 3.0”.


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What Brought Us Together: A Mixed Story on Engagement Strategies

The Good The Bad The Ugly

• CEO’s least satisfied with

engagement, of core HR

services

• Engagement

effectiveness scores

below 40% for both HR

and Non-HR

• In medium and large

organizations,

engagement action

planning rated as least

effective HR area

• 3.4 times more

productive

• 7 times more likely to

recommend organization

• 147% higher earnings

per share compared to

competition (Gallup)

• 75% have no

engagement strategy (Dale Carnegie)

• Turnover costs $11

Billion annually (Dale

Carnegie)

• Active disengagement

costs the US $370 Billion

annually (Gallup)

• Voluntary turnover

increasing since the

recession


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To date, engagement initiatives have remained largely reactive – in the future, effective engagement will?

2001 – 2003 2004 – 2014

Ownership

Focus

Measurement

Action

Engagement 1.0

Annual point-in-time survey

Employee Engagement:

emotionally connected and

committed

Engagement 2.0

2001 – 2003 2004 – 2014

The evolution in

the definition of

engagement

Leader-Based Engagement:

Effective leadership practices.

Engagement 3.0

Satisfaction survey

Employee satisfaction Survey score

Real-time measures

Business results

Fragmented and reactive Formal and reactive Agile and customized

Personnel Human Resources Leader-driven

2015 –

Employee Satisfaction:

Satisfied

McLean & Company 7

Group Activity – 10 Minutes


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Group Exercise

At your table discuss one of the categories below:

Table 1: Linking Engagement to Business Results

Table 2: Mechanisms of Tracking and Measuring Engagement

Table 3: Action Planning & Executing Engagement Strategies

Table 4: Who should be Accountable for Engagement?

Table 5: Who has the most Impact?

McLean & Company 9

Moving Beyond Traditional Engagement – 20

Minutes


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To date, engagement initiatives have remained largely reactive – in the future, effective engagement will?

2001 – 2003 2004 – 2014

Ownership

Focus

Measurement

Action

Engagement 1.0

Annual point-in-time survey

Employee Engagement:

emotionally connected and

committed

Engagement 2.0

2001 – 2003 2004 – 2014

The evolution in

the definition of

engagement

Leader-Based Engagement:

Effective leadership practices.

Engagement 3.0

Satisfaction survey

Employee satisfaction Survey score

Real-time measures

Business results

Fragmented and reactive Formal and reactive Agile and customized

Personnel Human Resources Leader-driven

2015 –

Employee Satisfaction:

Satisfied


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1 Escape the

Employee

Satisfaction Mindset

2 Focus on

Direct Business Drivers

3 Match

Assessment and

Management Cadence

4 Recalibrate for

Multi-Level Intervention

5 Don’t Just

Engage, Lead

Five key insights define the new era of engagement – and the move to integrated leadership empowerment

FROM EMPLOYEE ENGAGEMENT TO A LEADERSHIP EMPOWERMENT STRATEGY


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1 Escape the Employee Satisfaction Mindset

Even though we apply much greater analytical rigor today, our framework hasn’t changed

significantly from the 1990s when we assessed employee satisfaction.

A traditional “satisfaction state of mind” approach won’t lead to meaningful benefits for your people and organization


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Satisfied Chickens & Engaged Pigs – The American Breakfast


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A widespread focus on the

employee satisfaction framework

has caused “incrementalism”

• Most organizations experience very

little fluctuation in engagement score

year-over-year; they see only

incremental improvement.

• Given the minimal variation,

whether fluctuations represent

true change is up for debate.

Incremental improvements in engagement are common in organizations with a “satisfaction state of mind” focus

Despite some real improvements in our scores and even retention, it just feels like a lot of effort for relatively little return.

— Head of HR, Fortune 500 Company


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Leading-edge companies have produced innovations to drive engagement, avoiding victimhood

Continuous Employee

Sentiment Assessment

Brand

Ambassadors

Customer

Experience

Analog

Stop Work Authority

Employee Swaps

to Exchange Ideas

Gamification

of Product

Knowledge

Data-Centric HR Decision Making

Escalating

Voluntary

Exit Bonuses

Employee-Owned Individual

Engagement Strategies

Social Media Metrics Replace

Employee Surveying

Tailored Survey Strategies

by Employee Type

Engagement

Council


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2 Focus on Direct Business Drivers

While the traditional targets of employee engagement – retention and discretionary effort –

are important, progressive companies focus engagement directly on agility, cost, quality, and

revenues.

A focus on direct business drivers helps transition engagement from intangible “fluff” to tangible strategic impact

Tie engagement to the vision and mission of the company, and to business goals.

Connect engagement with business results, proving that it’s not HR “fluff.”

Move away from a cookie-cutter approach to manifest tangible results.


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Move Up The Employee Measurement Value Ladder

While targeting engagement as a leading indicator may be possible for some business

results, progression to the state of pattern recognition is at the heart of Engagement 3.0.

Source: Jac Fitz-enz, 2010

Prescriptive Behavioral Change

Pattern Recognition

Benchmarking

Links to Core Goals

Activity Data

Low

High

Recording

Relating

Comparing

Understanding

Predicting


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Predict behaviors that drive desired business results through the right engagement question

Endorsement

Openness & Agility

Awareness

Past Future Present

Three common approaches to selecting the right

engagement question(s) to drive business results:

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Employee engagement impacts business results

Employee Engagement Organizational Strategy Business Results

Engaged employees

are 3.4 times more

productive than

employees who are not

engaged (McLean &

Company, 2015,

N=17,367).

The engagement connection:

Best Buy found that the value of a 0.1% increase in

engagement was $100,000 in a store’s annual operating

income (Davenport, Harris and Shapiro, 2010).

Examples:

Molson Coors found that highly engaged employees

were 5 times less likely to have a safety incident and 7

times less likely to have a lost-time safety incident than

their disengaged counterparts. By strengthening

employee engagement, the company saved

$1,721,760 in safety costs in one year (SHRM

Foundation Executive Briefing, 2012).


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3 Match Assessment and Management Cadence

Align the timing of engagement assessments and engagement-affective decisions. For some

employees, this may be infrequent, but for others such as customer service, it may be daily.

Aligning assessment cadence and management cadence optimizes engagement and drives business results

Create more valid, reliable links with business data (consistent tracking).

Increase manager investment and accountability.

Reduce the risk of biased data due to managers “gaming” the results.


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Lead people instead of managing averages by tracking fluctuations in engagement

FY 2014 FY 2015

40%

Engaged

30%

Engaged

100%

0%

% E

ng

ag

em

en

t

Annual Assessment

FY 2014 FY 2015

40%

Engaged

30%

Engaged

100%

0% %

En

ga

ge

me

nt

Quarterly Assessment

Important fluctuations in engagement

happen across a day, week, or month that

are not captured in the annual measure.

More frequent engagement tracking gives a

better understanding of why changes happen

and helps managers better lead their people.

Remember that engagement itself is an “average” concept; an engagement score is an average of a

variety of different engagement factors (e.g. collaborative posture, mood, autonomy) – all of which can

fluctuate differently.


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4 Recalibrate for Multi-Level Intervention

Employee engagement happens at the individual level. Deploy engagement tools that enable

action anywhere from the enterprise-level all the way down to mass-customized solutions for

individual employees.

Match real-time engagement measures with frequent and relevant actions

Create opportunities for rich discussions between leaders and employees.

Leaders can tailor engagement efforts most suitable for their team.

Help you not lose sight of the employee.


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Levels of Analysis Matter

While the business is looking for a

“silver bullet” that will solve all

engagement problems for all time, we

must learn to fine tune engagement

tactics to map against strategic

inflection points in the business.

We must find ways to capture

fluctuations and variance in

engagement at various levels;

ultimately getting an “N of 1” and

“mass customized” empowerment

strategies/tactics. Engagement Index

Enterprise

Region

Business Unit

Teams

Employee


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5 Don’t Just Engage, Lead

The litmus test for an effective engagement program is whether or not the output routinely

changes how managers interact with their employees, and even more importantly, how it

affects the daily dialog among the firm’s leaders. Engagement needs to be a way of life for

leaders, not an add-on.

Employee engagement is fundamentally about leadership

Leaders have the single greatest impact on engagement.

Engagement happens every day, through every interaction.

Leaders should tailor engagement to individual team members.

McLean & Company 25

At its core, employee engagement is fundamentally about leadership: people leadership

Engaging Behavior:

ongoing dialog focused on energizing and connecting

employees to business results linked to organizational

strategy.

Leader-Driven:

Reflection of effective day-to-day management practices

and behaviors.

The litmus test for effective engagement focus is whether or not the data routinely changes

how managers interact with their employees. This requires two main shifts:

HR Owned:

Reflection of effective HR practices.

Engagement Score:

where aggregate year-over-year results.

Business Results

Engagement can’t be delegated. - Denny Dotson, Chairman, People Driven Performance

It’s the decisions, behaviors, and actions of leaders that actually contribute to developing true

engagement in the workforce.

- Kenneth A. Finneran, Chief Human Resources Officer National

Beverage Corp.


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1 Escape the

Employee

Satisfaction Mindset

2 Focus on

Direct Business Drivers

3 Match

Assessment and

Management Cadence

4 Recalibrate for

Multi-Level Intervention

5 Don’t Just Engage,

Lead

Summary: Move to integrated leadership empowerment using McLean & Company’s five Engagement 3.0 insights

Abandon

fragmented

employee

engagement

activity.

Redefine

engagement’s

purpose from

driving an index

metric to driving

business results:

Shift cadence from

static annual

surveys and

scheduled pulses to

“just in time”

sensing and

responding

Adjust focus from

organizational-level

metrics to multi-

level views of

engagement.

Embrace integrated

leadership

empowerment.

FROM EMPLOYEE ENGAGEMENT TO A LEADERSHIP EMPOWERMENT STRATEGY

McLean & Company 27

Follow McLean & Company’s 4-step process to support integrated leadership empowerment in your organization

Sustainable execution on organizational strategy to deliver on business results can only be

optimized through integrated leadership empowerment. Leaders who demonstrate they

are invested in their people drive investment by their people.

Follow these process steps to reinforce leader-driven employee engagement in your organization.

Organizational Strategy

Leader-Driven Employee

Engagement

Business Results

Introduce a more

dynamic engagement

measurement

Step 1

Make the connection

between engagement

and business results

Step 2

Reinforce leaders’

role in the new

engagement paradigm

Step 3

Prepare to launch

Step 4

McLean & Company 28

Q&A – 10 Minutes

McLean & Company 29

Stakeholder Buy-in: Neutral and Resistant Managers

– 10 Minutes

McLean & Company 30

Engagement is a means to an end, not an end in itself

Engage so often means a survey. - Derek Irvine, Globalforce

Focus on the reasons why engagement is a

priority in an organization, and prepare to make

the connection to:

Organizational agility

Product quality

Revenue

Profitability

Market share/growth

Customer retention

McLean & Co. Insight

While linking engagement to customer satisfaction is a powerful start, the measurable connection needs to go further and link

to other business outcomes that translate to profitability and ultimately sustainable business growth.

Organizations that obsess over engagement scores are focused on the “percentage of

engaged employees,” rather than the associated business outcomes that make

engagement a worthy focus area.

At a micro-level, it’s time to stop trusting and time to start testing.

- David Zinger, Employee Engagement Expert

and Speaker

McLean & Company 31

Debunk myths and avoid pitfalls to make the links to business results

Myths Pitfalls

Engagement initiatives that boost attraction and

retention will naturally translate into a more productive

workforce.

• While summer hours and cool offices address some

engagement drivers, they don’t address the job

engagement drivers required to drive productivity.

Lack of support for employee engagement initiatives at

the senior level.

• Senior leadership sets the tone and purpose for

engagement. Support must start from the most senior

levels of management and cascade down.

Engagement is impossible to measure beyond

correlation.

• Best practice companies are measuring and monitoring

the cause and effect of engagement on key business

metrics.

Celebrating the engagement score as the end result.

• Improved business results are the goal, with engagement

as the means to an end.

One size engagement fits all.

• Each team and individual has unique engagement needs.

Engagement interventions must empower managers to

address these needs in a way that is aligned with the

organization’s overall mission, vision, and values.

Focus on “how” engagement is measured, rather than

“why” it is measured.

• Engagement initiatives should focus on the actions,

activities, and leadership behaviors that support it.

High performers are more engaged.

• While we know engagement drives performance,

research demonstrates the reverse isn’t necessarily

accurate. Managers cannot assume high performers are

naturally more engaged (HBR).

HR has been responsible for employee engagement and

may be reluctant to give up this control.

• For engagement to meet business results, it needs to be

driven and owned by people managers (Aon Hewitt, 2014)

- HR is a support mechanism (Aon Hewitt, 2015).

McLean & Company 32 32

Actually, it’s not very complicated at all. The first step is

to begin the dialog with your employees to identify what

can be done to improve their engagement on the team.

No, engagement is a reflection of effective management

practices, which makes it a “leader as people manager”

thing – HR is there as a support mechanism.

Leaders may have concerns about their new role in engagement, so prepare to address them

“Engagement is an HR thing. Why should

I be responsible for it?”

“Having an impact on my team’s

engagement seems overwhelming. I don’t

know where to start.”

It should be – engagement impacts pretty much every

aspect of employment and your ability to achieve your

business goals.

“I have a lot of things on my plate and

engagement is not one of them.”

Effective interventions recognize that one size does not fit

all when aiming for engagement at the personal level.

Engagement is a relationship, not a project, and an

employee’s relationship with their leader is among the most

important factors affecting engagement.

“I don’t have control over the factors

affecting my team’s engagement.”

“If I do something different with my team

that no one else does with their team, it

will be perceived as unfair.”

Leaders are employees too so begin by talking to your

leader. You’re right; you won’t be able to engage your

employees if you are not engaged.

“How can I keep my employees engaged

when I’m feeling disengaged myself?”


Follow McLean & Company’s 4-step process to support integrated leadership empowerment in your organization

Sustainable execution on organizational strategy to deliver on business results can only be

optimized through integrated leadership empowerment. Leaders who demonstrate they

are invested in their people drive investment by their people.

Follow these process steps to reinforce leader-driven employee engagement in your organization.

Organizational Strategy

Leader-Driven Employee

Engagement

Business Results

Introduce a more

dynamic engagement

measurement

Step 1

Make the connection

between engagement

and business results

Step 2

Reinforce leaders’

role in the new

engagement paradigm

Step 3

Prepare to launch

Step 4


Whats Next?

Please Contact me at [email protected] if you’d like additional

insights. I am happy to trade ideas, and discuss the paradigm shift in

engagement.

Thank You!

Brad Markis

Product Manager

McLean & Company

mailto:[email protected]

Brad Markis, Product Manager, McLean & Company

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