Employee Engagement: What got us here won’t get us there The new reality for ambitious HR functions ‘Think HR. Think Human Capital.’ Tour 2013 HR Directors Summit ICC Birmingham UK 2013 Nicholas J Higgins, DrHCMI MSc Fin (LBS) MBA (OBS) MCMI CEO, VaLUENTiS Ltd & Dean, International School of Human Capital Management (‘ISHCM’)
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Employee Engagement: What got us here won’t get us there
The new reality for ambitious HR functions
‘Think HR. Think Human
Capital.’ Tour 2013
HR Directors Summit ICC Birmingham UK 2013
Nicholas J Higgins, DrHCMI MSc Fin (LBS) MBA (OBS) MCMI
CEO, VaLUENTiS Ltd & Dean, International School of Human Capital Management (‘ISHCM’)
Video version available through WTG on-demand service.
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Please e-mail [email protected] regarding any matters of reproduction/ organisational distribution.
Slides [4 to 52] on auto presentation to music introduction.
Welcome….
2013 sees VaLUENTiS celebrate its tenth year….
7
Some notable achievements…
First British firm to introduce Employee Engagement model (known as the ‘5D’)
First to introduce standard ‘employee engagement surveys’ as opposed to ‘generic’ employee
surveys
First to publish live client HR scorecard linking with employee engagement
First to introduce ‘Qual-Quant’ people management evaluation tool (‘Management Pathfinder’)
First to introduce global value-based HR function (VB-HR™) profiler
First to publish global Human Capital Reporting Standards (GHCRS2006) including the ‘PeopleFlow’, ‘HC Operating’ and ‘HC Productivity’ template statements…
Globally, first to set-up dedicated, practitioner-based Business School on Human Capital
Management and introduce ‘M. Sc. in Human Capital Management’
First School to offer Masters qualification with CMAS® technology (‘non-essay’ based) and for less than £1000
HCMI first to offer membership by association not subscription……
VaLUENTiS continues to support those organisations and HR functions who wish
to push the boundaries on employee engagement and organisation
performance……….
And so let me begin…
A long time ago in a far, far away place we started with the question:
If employee engagement was the answer, what was the question?
And, what constituted employee engagement and how did it impact on
performance?
Which led us to evaluating much empirical research, and, finally to this…
The concept of Employee Engagement: A synthesis of antecedent theories and empirical evidence with human capital
management practice related to organisation performance – 100 years in the making
Source: The antecedents of Employee Engagement, Nicholas J Higgins - VaLUENTiS technical paper 2003
Wider Group
Immediate Team
Organisation Individual
•Group theory
•Trust theory
•Teams theory
•Conflict theory
•Decision-making theory
•Motivation theory
•Goal setting and task theory
•Equity (justice) theory
•Trait theory
•Expectancy theory
•Commitment theory
•Needs theory
•Social cognitive/ self efficacy theory
•Cognitive dissonance
•Wellbeing/Burnout
•Job satisfaction
•Organisation Citizenship Behaviour
•Learning theory
•Behaviourism
•Emotional Intelligence
•Psychological contract
•Leadership theory
•Organisational ‘fit’ theory
•Other I/O psychology contributions
•Organisation performance & measurement*
Human Capital Management practice/systems:
•Training & Development
•Performance management
•Reward & recognition
•Resourcing & selection
•Organisation communication
•Talent management
•Leadership
•Organisation culture
•Employer brand
•Human capital retention
•Organisation design
•Workforce diversity
•High performance work systems
•Fayol - Principles of management
•Taylor - Scientific management
•McGregor Theory X/Y
•Mayo/Hawthorne studies
•Tavistock – Socio-technical systems
•Lewin (MIT) - group dynamics/behaviour
•Munsterberg - Industrial psychology
•Follett - Management relations/integration
•Hertzberg – Two factor theory
•Drucker – Practice of management
•Kahn – Personal engagement
•Likert – Management system/measurement scale
But organisations needed something to use practically…
That led to the 5D construct…
Line of sight
Work environment
Operating culture
Development
Reward (equity)
Performance link
Five domains…
Plus performance
Which used seven core theories as its root structure…
VaLUENTiS 5D Employee Engagement: Core empirical theories that combine to form the root structure of the VaLUENTiS model
Source: The antecedents of Employee Engagement, Nicholas J Higgins - VaLUENTiS technical paper 2003
Wider Group
Immediate Team
Organisation Individual
•Motivation theory
•Goal setting and task theory
•Equity (justice) theory
•Group theory
•Trust theory
•Trait theory
•Fayol - Principles of management
•Taylor - Scientific management
•Expectancy theory
•Commitment theory
•Teams theory
•Conflict theory
•Needs theory
•Organisation performance & measurement*
•Social cognitive/ self efficacy theory
Human Capital Management practice/systems:
•Cognitive dissonance
•Wellbeing/Burnout
•Job satisfaction
•Organisation Citizenship Behaviour
•Learning theory
•McGregor Theory X/Y
•Behaviourism
•Training & Development
•Performance management
•Reward & recognition
•Resourcing & selection
•Organisation communication
•Talent management
•Leadership
•Organisation culture
•Employer brand
•Human capital retention
•Organisation design
•Decision-making theory
•Emotional Intelligence
•Workforce diversity
•Mayo/Hawthorne studies
•Tavistock – Socio-technical systems
•Lewin (MIT) - group dynamics/behaviour
•Psychological contract
•Leadership theory
•Organisational ‘fit’ theory
•Other I/O psychology contributions
•High performance work systems
•Munsterberg - Industrial psychology
•Follett - Management relations/integration
•Hertzberg – Two factor theory
•Drucker – Practice of management
•Kahn – Personal engagement
•Likert – Management system/measurement scale
“But all the others have a part to play…”
Over time working with clients, we noticed that organisations needed to focus on six
areas to sustain successful employee engagement…
Known as the ‘Six Pillars’…
EE PLAYBOOK
Grounded understanding of Employee Engagement
Working definition of Employee Engagement
Measurement wisdom
Actioning infrastructure
Dynamic EE-Performance ‘playbook’
DELETE Competent leadership/management
Initial research and observation revealed essentially four types of organisation…
Organisations and employee engagement:
The ‘4-ball’ practice model
Play down
‘We don’t...’
Play act
‘It’s all about PR…’
Play safe
‘At least we audit/ benchmark...’
Play make
‘We do it…’
The four progressive states of employee engagement
embeddedness in organisations
To create…
Little. Limited.
Mostly ephemeral in nature.
Exists in pockets with variation in line management.
Good working knowledge embedded across
organisation.
No definition in use. Most likely borrowed
without any real ownership, or ‘false’ ownership.
Maybe borrowed with internalisation or adapted after some organisational
Probably in the form of basic management courses. Most likely carry out some form of
branded programme.
Will have a number of actioning elements in place but not necessarily joined
up.
Will have necessary ‘toolkit’ to hand with ongoing programmes to suit organisation focus.
Does not exist.
May have something articulated on ‘strategies’.
Most likely collection of irrelevant case studies.
Playbook in the form of ‘manager manual’ or on-line knowledge-share. Still being
developed.
Easy access in different e-/physical formats at
different levels. Signals ‘embedded’ intent.
Will have varied mix of skilled people managers. Existing good performers
more through luck.
Will have varied mix of skilled people managers. Existing good performers
more through luck.
Will have varied mix of skilled people managers but level of competency higher than Play-Act organisations.
Cohort of well-trained people managers exists with
talent pools. Regular evaluation/reinforcement.
‘PLAY DOWN’ ‘PLAY ACT’ ‘PLAY SAFE’ ‘PLAY MAKE’
I Grounded understanding of employee engagement
II
III
IV
V
VI
Working definition of employee engagement
Measurement wisdom
Actioning Infrastructure
EE-Performance Playbook
Competent leadership/ management
The ‘4-ball’ Employee Engagement reality matrix
Pillar
What does your quick assessment tell you…?
And now, a few questions for you…
No pressure!
1. Which decade were employee surveys first introduced as a management
tool…?
2. Which famous experiments took place at Western Electric Co in the 20th
Century…?
3. Which US company is most associated with employee surveys and causal studies linking to performance …?
4. Which author, with an article published in 1990, is attributed as being
the first to use the term ‘employee engagement’…?
5. Employee engagement is…? a) A work-place approach b) A concept c) A strategy d) All of these e) Something else
6. What is the connection between job satisfaction and job performance…?
7. What is ‘acknowledged’ as the single biggest factor in an individual’s
engagement at work…?
8. What’s wrong with Maslow’s pyramid?
9. What are the SEVEN core empirical theories that form the root structure of VaLUENTiS 5D employee engagement
model?
10. Complete this ‘well-known phrase’: “If employee engagement was the
answer, …………………………......?”
How did you do…?
Employee Engagement: What got us here won’t get us there
The new reality for ambitious HR functions
53
Part I
Getting us here…
53
1. Which decade were employee surveys first introduced as a management
tool…?
2. Which famous experiments took place at Western Electric Co in the 20th
Century…?
3. Which US company is most associated with employee surveys and causal studies linking to performance …?
A look back at The original Sears E-C-P Chain… (an early forerunner of ‘employee engagement’ with causal performance link)
Attitude
about the
job
Employee
Behavior
Customer
Impression
Customer
recommendations Service
Helpfulness
The Employee-Customer-Profit chain at Sears By Anthony J. Rucci , Stephen P. Kirn and Richard T. Quinn Harvard Business Review Jan-Feb 1998
Attitude
about the
company
Merchandise
Value
Employee
retention Customer
retention
Return on assets
Operating margin
Revenue growth
5 unit increase in employee
attitude
13 unit increase in customer impression
0.5% increase in revenue growth
A compelling place to work A compelling place to shop A compelling
place to invest
57
Organisation Performance (as defined by organisation/unit scorecard measures and derivative metrics)
Examples of organisation performance areas:
Sales Revenue
Service delivery
Customer satisfaction
Patient care
Procurement
Operational risk
Product development
Organisation support
Safety
Quality
Cost…
59
Sub-optimal performance, i.e. less than achievable
Or
Sub-optimal costs, i.e. higher than necessary
Or
Both
Impaired Employee Engagement: Impact on individual and team productivity/performance
59
4. Which author, with an article published in 1990, is attributed as being
the first to use the term ‘employee engagement’…?
61
Psychological Conditions of Personal Engagement and Disengagement at Work
William A. Kahn
Academy of Management Journal 1990
“Personal Engagement is the simultaneous employment and expression of a person’s ‘preferred self’ in task behaviors that promote connections to work and to others, personal presence (physical, cognitive and emotional), and active, full role performance.”
61
Employee engagement as a sum of constant work ‘forces’ (VaLUENTIS EESoF model) illustrative vectors
interpersonal conflict
incentive misalignment
perceived reward inequity short-staffed
uncaring new boss
poorly communicated reorganisation
enlarged role
planned training
cancelled
Well-received performance appraisal hit personal
targets/ objectives
hit team targets/ objectives
salary increase
enrolled on MD programme
“A further, more up to date interpretation…”
62
5. Employee engagement is…? a) A work-place approach b) A concept c) A strategy d) All of these e) Something else
6. What is the connection between job satisfaction and job performance…?
7. What is ‘acknowledged’ as the single biggest factor in an individual’s
engagement at work…?
Illustrating the management influence using VaLUENTiS 5D Employee Engagement Framework
A manager has influence in many areas of engagement, some more than others… 66
8. What’s wrong with Maslow’s pyramid?
9. What are the SEVEN core empirical theories that form the root structure of VaLUENTiS 5D employee engagement
model?
VaLUENTiS 5D Employee Engagement: Core empirical theories that combine to form the root structure of the VaLUENTiS model
Source: The antecedents of Employee Engagement, Nicholas J Higgins - VaLUENTiS technical paper 2003
Wider Group
Immediate Team
Organisation Individual
•Motivation theory
•Goal setting and task theory
•Equity (justice) theory
•Group theory
•Trust theory
•Trait theory
•Fayol - Principles of management
•Taylor - Scientific management
•Expectancy theory
•Commitment theory
•Teams theory
•Conflict theory
•Needs theory
•Organisation performance & measurement*
•Social cognitive/ self efficacy theory
Human Capital Management practice/systems:
•Cognitive dissonance
•Wellbeing/Burnout
•Job satisfaction
•Organisation Citizenship Behaviour
•Learning theory
•McGregor Theory X/Y
•Behaviourism
•Training & Development
•Performance management
•Reward & recognition
•Resourcing & selection
•Organisation communication
•Talent management
•Leadership
•Organisation culture
•Employer brand
•Human capital retention
•Organisation design
•Decision-making theory
•Emotional Intelligence
•Workforce diversity
•Mayo/Hawthorne studies
•Tavistock – Socio-technical systems
•Lewin (MIT) - group dynamics/behaviour
•Psychological contract
•Leadership theory
•Organisational ‘fit’ theory
•Other I/O psychology contributions
•High performance work systems
•Munsterberg - Industrial psychology
•Follett - Management relations/integration
•Hertzberg – Two factor theory
•Drucker – Practice of management
•Kahn – Personal engagement
•Likert – Management system/measurement scale
69
“But all the others have a part to play…”
10. Complete this ‘well-known phrase’: “If employee engagement was the
answer, …………………………......?”
71
Absenteeism, turnover, ill-discipline, manager resistance, communication and/or trust issues etc are all, to a great degree, manifestations of poor employee engagement in some form.
“Many case studies and indeed academic comment, however, seem to ignore this fact. Thus, we’re seemingly praising ourselves for putting a fire out – the very one we started as an organisation! What happened to the ‘Why’ in the first instance?
As an industry practitioner question - What’s going on here?”
Observation 101
71
72
Part II
Getting us there…
72
Back to the ‘Six Pillars’…
EE PLAYBOOK
1. Grounded understanding of Employee Engagement
2. Working definition of Employee Engagement
3. Measurement wisdom
4. Actioning infrastructure
5. Dynamic EE-Performance ‘playbook’
DELETE 6. Competent leadership/management
73
What got us here/Getting us there…1
Grounded understanding of Employee Engagement
• Insufficient appreciation of existing empirical research
The concept of Employee Engagement: A synthesis of antecedent theories and empirical evidence with human capital
management practice related to organisation performance – 100 years in the making
Source: The antecedents of Employee Engagement, Nicholas J Higgins - VaLUENTiS technical paper 2003
Wider Group
Immediate Team
Organisation Individual
•Group theory
•Trust theory
•Teams theory
•Conflict theory
•Decision-making theory
•Motivation theory
•Goal setting and task theory
•Equity (justice) theory
•Trait theory
•Expectancy theory
•Commitment theory
•Needs theory
•Social cognitive/ self efficacy theory
•Cognitive dissonance
•Wellbeing/Burnout
•Job satisfaction
•Organisation Citizenship Behaviour
•Learning theory
•Behaviourism
•Emotional Intelligence
•Psychological contract
•Leadership theory
•Organisational ‘fit’ theory
•Other I/O psychology contributions
•Organisation performance & measurement*
Human Capital Management practice/systems:
•Training & Development
•Performance management
•Reward & recognition
•Resourcing & selection
•Organisation communication
•Talent management
•Leadership
•Organisation culture
•Employer brand
•Human capital retention
•Organisation design
•Workforce diversity
•High performance work systems
•Fayol - Principles of management
•Taylor - Scientific management
•McGregor Theory X/Y
•Mayo/Hawthorne studies
•Tavistock – Socio-technical systems
•Lewin (MIT) - group dynamics/behaviour
•Munsterberg - Industrial psychology
•Follett - Management relations/integration
•Hertzberg – Two factor theory
•Drucker – Practice of management
•Kahn – Personal engagement
•Likert – Management system/measurement scale
75
HR as…
Evidenced Based
Management (EBM)
Practitioner
Objective: Proficient knowledge embedded across HR function
to enable good working knowledge to be embedded across
organisation.
What got us here/Getting us there…2
Working definition of Employee Engagement
• Many definitions omit productivity or performance • Definitions vague – difficult to translate to frontline • Too few involved in the ‘understanding process’
77
78
“Employee engagement is an ‘outcome-based’ concept*. It is the term used to describe the degree to which employees can be ascribed as ‘aligned’ and ‘committed’ to an organisation such that they are at their most productive.”
VaLUENTiS/ISHCM
2005
Employee Engagement Definition One that provides the basis of a measurable construct
(and simplified from the overall EE complexity):
*Consistent with Kahn’s original paper; employee engagement as a concept but with a more performance-oriented and dimensional construct. 78
‘P12 modes of productivity’
More likely to embrace set
values
More likely to produce higher grade/quality of
work (less errors)
More likely to be flexible to
organisation needs (if equitable)
Less likely to suffer stress
(but more likely to suffer burn-out)
More likely to achieve goals set
More likely to ‘own’ their development
More inclined to input into ideas/
innovation
More likely to give discretionary effort above contractual
obligations
Less likely to move employer
Less inclined to take days off
More inclined to share knowledge
Applied across all job roles in the context of the role specificity and environment which impact on individual and
collective performance
79
“Only one box in nine reflects the constant ‘high bar’ challenge for organisations in optimising engagement across the workforce on a daily basis”
Staff engagement: The challenge for organisations (The A-C Matrix)
This is an example where front-line client projects meet management learning. VaLUENTiS has customised Harvard/ECCH case studies by adding employee engagement profiles along with human capital data and analytics to create a far more enriched and practical learning experience for managers/practitioners. It’s also unique and cheap to deliver (and also effectively on-demand).
Employee Engagement triangulation “Squaring the circle…”
New (re)hire data
Performance appraisal data
Case data
Other internal survey/assessment data
Exit data
Organisation event log data
Critical incident data
Social media data
Customer/client/patient/citizen data
Employee/management survey data
86
HR as…
Smart Operator
Objective: HR function collectively possesses (or has access to)
measurement nous in people management evaluation.
What got us here/Getting us there…4
Actioning infrastructure • Tendency to focus on one-off isolated actions • Still treated as ‘imposed task’ not as part of culture • Over-focus on PR/Branding
88
Actioning Employee Engagement Infrastructure
(Purpose: ‘to embed’)
Supportive top leadership and ‘signalling’…
‘Interactive’ people management evaluation process map
Multi-survey mapping and
planning overlay
EE related development/
learning programmes & workshops
People Manager evaluation/
appraisal (regular
‘practice runs’)
Defined ‘how to’ strategies around engagement elements
‘Live’ Employee Engagement adapted QFD (‘House of Quality’)
Dedicated internal focus team or nominated ‘on-point’
person
Nominated People Manager Engagement line
champions
Organisation event logs Links into wider
organisation intelligence analytics
Wider communications/
branding
“Spinning plates cogs…” 89
Employee Engagement - Actioning Infrastructure
4
3
1
2
“Thus…” 90
HR as…
‘Perpetual’ Programme
Director
Objective: HR possesses the necessary ‘executive toolkit’ to
hand, in driving/creating ongoing engagement programmes ‘to
embed’ that complement organisation focus.
What got us here/Getting us there…5
EE PLAYBOOK Dynamic EE-Performance ‘playbook’
• No EE playbook • Little knowledge capture • Signalling opportunities missed
92
Mo
del
s St
rate
gies
Im
ple
men
tati
on
Le
arn
ing
Contents
1. Engagement strategies
2. Engagement operating ‘system’ models and analytics templates
3. Question-statement selection and construct design
4. Measurement index construction, maintenance and reporting
5. Engagement Driver Factor (EDF) analysis
6. Engagement ‘forcefield’ analysis
7. EE project management methodology and flowcharts
8. Engagement ‘issue work-through’ tools
9. Management learning programme design and evaluative criteria
Objective: HR function creates, maintains and evolves the ‘EE
playbook’ on behalf of the organisation to enable frontline
dissemination (whilst also signalling serious intent/reinforcement).
What got us here/Getting us there…6
DELETE
Competent leadership/management • Too few managers with understanding of EE • Little focus on managers own ‘engagement’ • Still too much tolerance of poor or average
(employee population: 20,000) Score range 200-1000
Source: VaLUENTiS Engagement database
14.5% below one standard deviation
738 1000 200
“Same data as previous slide – different graphic format…
Looking outside ‘norms’ that’s one in seven line managers posing serious concern…”
13.9% above one standard deviation
“And so…” 97
HR as…
People Management
‘Enforcer’
Objective: HR function as ‘enabler/enforcer’ to ensure cohort of
well-trained/engaged people managers exists within organisation.
EE Pillars and HR Masks…[recap]
EE PLAYBOOK
Grounded understanding of Employee Engagement
Working definition of Employee Engagement
Measurement wisdom
Actioning infrastructure
Dynamic EE-Performance ‘playbook’
DELETE Competent leadership/management
EBM Practitioner
Knowledge Facilitator
Smart Operator
‘Perpetual’ Programme Director
‘EE Playbook’ Guardian
Management ‘Enforcer’
99
100
HR functions have to embrace the fact that the de facto ‘reason for being’ is to be instrumental in optimising employee engagement within their organisation.
What got us here/Getting us there…7
“It’s no good talking about recruitment or talent management or any other HR processes for that matter if employee engagement is not embedded as core…
…Impaired engagement means individual effort and talent is just wasted. So therefore, what is the point of it not being de facto?”
100
Little. Limited.
Mostly ephemeral in nature.
Exists in pockets with variation in line management.
Good working knowledge embedded across
organisation.
No definition in use. Most likely borrowed
without any real ownership, or ‘false’ ownership.
Maybe borrowed with internalisation or adapted after some organisational
Probably in the form of basic management courses. Most likely carry out some form of
branded programme.
Will have a number of actioning elements in place but not necessarily joined
up.
Will have necessary ‘toolkit’ to hand with ongoing programmes to suit organisation focus.
Does not exist.
May have something articulated on ‘strategies’.
Most likely collection of irrelevant case studies.
Playbook in the form of ‘manager manual’ or on-line knowledge-share. Still being
developed.
Easy access in different e-/physical formats at
different levels. Signals ‘embedded’ intent.
Will have varied mix of skilled people managers. Existing good performers
more through luck.
Will have varied mix of skilled people managers. Existing good performers
more through luck.
Will have varied mix of skilled people managers but level of competency higher than Play-Act organisations.
Cohort of well-trained people managers exists with
talent pools. Regular evaluation/reinforcement.
‘PLAY DOWN’ ‘PLAY ACT’ ‘PLAY SAFE’ ‘PLAY MAKE’
I Grounded understanding of employee engagement
II
III
IV
V
VI
Working definition of employee engagement
Measurement wisdom
Actioning Infrastructure
EE-Performance Playbook
Competent leadership/ management
The ‘4-ball’ Employee Engagement reality matrix
Pillar
Where is your organisation currently…? 101
The ‘Play-Maker’ programme approach to Employee Engagement:
The first 100 days
VaLUENTiS has developed the ‘six-pillar programme’ to help organisations to get on/stay on the ‘Play-Maker’ approach. We call it the ‘100 day EE bootcamp’ for organisations. Want to try?
103
The Conference Board: CEO Top Ten Challenges 2013
2013 rank CHALLENGES 2013 2012 rank
N = 729 N = 776
1 Human capital 2
2 Operational excellence na1
3 Innovation 1
4 Customer relationships 7
5 Global political/economic risk 3
6 Government regulation 4
7 Global expansion 5
8 Corporate brand and reputation 9
9 Sustainability 8
10 Trust in business na2
Source: The Conference Board CEO Challenge 2013 (www.ceochallenge.org)
1Operational excellence replaced Cost optimisation; 2Trust in business replaced Investor relations
“Just in”
103
Little. Limited.
Mostly ephemeral in nature.
Exists in pockets with variation in line management.
Good working knowledge embedded across
organisation.
No definition in use. Most likely borrowed
without any real ownership, or ‘false’ ownership.
Maybe borrowed with internalisation or adapted after some organisational