Employee Engagement in the 21st Century

Abstract

“Engaged employees are those who know that their work contributes to company success, and who feel a sense of pride in the company’s goals (Soyars, Brusino 2009).”  All too often in the U.S. corporate environment employees have strained relationships with their immediate supervisors which can have an indirect impact on overall production and efficiency.  The cause of the strain is unique to each situation, but many times it is the result of the company culture whereby lower-level, or line employees, are made to feel inferior to the managers who supervise them.  The intent of this strict “worker/supervisor” relationship is to maintain order and structure in the workplace some would argue.  In a strained relationship, communication becomes minimal, even at the expense of production.  Strained relations between employer and employee potentially result in a poor work environment for all concerned.  If the worker feels he/she is expendable, or that their daily contributions go largely unnoticed, and unrewarded, then overall morale suffers.  Morale is important, because if a company has a reputation of treating their employees poorly, eventually, valuable employees will depart and the company will begin to attract less talent.  Most companies from the “Net Generation” understand this concept, and act accordingly; Google, Sandisk, and Intel, are some examples.  They have implemented a ‘systems approach’ to their corporate structure, whereby the information exchange is bottom-up.  They don’t demand changes from the top-down, as more traditional companies tend to do.  In the ASTD-Dale Carnegie Institute study conducted on Employee Relations in 2008, approximately 91% of employees surveyed, from several different industries, stated the most important factor for “quality employee relations with their employer” was the relationship between themselves and their immediate supervisors (Soyars, et al, 2009).  People want to be respected by their superiors in the workplace!  The motivations probably vary greatly as to why, but the fact remains:  Employees want credible, trustworthy relationships with the companies that employ them; not only with their co-workers and direct supervisors, but with senior management as well.

I intend to explore the topic of employee relations, or employee engagement, to a level that will shed light on companies who fail to treat leadership as a relationship based on trust and credibility.  I plan on comparing/contrasting the varying approaches that present-day companies take with respect to their overall attitude of the employee-employer relationship.

Meritocracy, or Seniority?

A meritocracy is basically a system in which the talented are chosen and moved ahead based on their achievement.  Does the company you work for subscribe to this model, or is it more of a seniority model?  In the military, we use the phrase, “time-in-grade” as a metric in who gets promoted before someone else.  The “grade” is pay grade of course, as the military adheres to a strict “chart” which determines one’s pay.  Are you’re managers, or even yourself, in the position you are in because of proven ability?  Or is it based solely on seniority?  What is the more accurate, and fair way to promote?  This article gives some interesting views into the subject, though it looks at it from a more macro-view than the question(s) I am asking.

Open lines of communication with management? Or shut-up?

How comfortable do you feel about speaking up to your superiors at work?  By speaking up, I’m referring to making suggestions about how to improve working conditions, or how to be more efficient with a particular procedure, or even discussing a co-worker’s extra-curricular activities?  It seems it depends on the personality of both the manager with whom you would offer your two-cents, and the employee willing to talk.  Is your manager willing to listen to you?  Or do you feel he/she would merely think less of you for being “nitpicky,” or “whiny?” 

In this post from Harvard Business Review, the authors cite that,”about 20% of employees say a fear of consequences has led them to withhold suggestions…for addressing problems…and making improvements,” in the workplace.  Is this true in your work environment?   And the more intriguing question, given the nature of our class:  If YOU are the manager, how do you react to suggestions/improvements/gossip from your employees?  Does it depend on whom the employee is who is speaking up?  Do you listen more intently to the employee who rarely speaks up, versus the employee who comes to you three times a week to inform you of the ‘goings-on’ within the team?  What are your thoughts on these matters?

Home Ownership…Lessons Learned (hopefully)

Is home ownership an American right?  The government seems to think so.  I disagree.   With all that has transpired over the past 5 or so years with regards to the housing market bubble, the subsequent bubble burst, and the current state of the economy (directly resulting from the housing crash), I think its a fair question to ask.

For those who don’t understand the “housing game,” here’s a brief synopsis.  A buyer approaches a bank (lender) for approval on a mortgage loan.  The bank either accepts or rejects the application based on multiple factors, most of which are common sense (FICO score, credit history, employment status, etc.).  If the bank accepts the application, they lend the necessary funds to the buyer.  Here is where gov’t plays a role:  After the bank cuts the check to the buyer, they turn around and sell that mortgage in what is called the “secondary market,” to either Freddie Mac or Fannie Mae.  These two organizations own more than 50% of secondary market mortgages…over $6 trillion.  Freddie and Fannie are GSEs (Government Sponsored Enterprises).

Given that information, consider what happened back in say, 2005 and beyond.  Government is heavily involved in the housing market, the housing market surges, and then that same housing market inevitably pays the price when the gov’t bails out, leaving lenders on the hook for loans they approved (in cases they should not have).  Recently the Home buyer’s Tax Credit (which expired April 30, 2010) gave first-time buyers an $8000 tax credit.  This incentive, many argue, artificially propped up the housing market for the year the tax credit was in place.

Owning a home requires hard work, discipline and common sense.  It is not a right to own a home, though may Americans think it is.  We need to get back to the basics of home ownership in this country:  affordability and responsibility.  We all share the blame in what happened beginning in late 2007, and continues today.  Lenders, the gov’t and Americans in general, are required to understand the responsibilities entailed with home ownership.  We need to rely on ourselves, not the gov’t or some aggressive lender, looking to approve applicants without conducting due diligence.  Home ownership is a privilege…one not entitled to everybody.

Your Customers are Speaking..Is Your Company Listening?

Innovation seems to be the buzzword of business in the 21st century.  But then again, innovation has always been important, especially with respect to developong new products.  What seems to have changed however, is the focus of innovation in most companies.  The 20th century model of innovation was about quality control, cost-cutting, and operational efficiency.  Today innovation appears to be about businesses re-inventing themselves, collaboration with other other companies, and creating entirely new markets to meet the untapped customer needs that widely exist.  With an increase in globalization, the growth of the Internet, and more demanding customers, businesses of all sorts are forced to re-think their ideas of innovation and are constantly reminded to meet the ever-changing needs of customers. 

One thing all innovative companies possess is a sharp focus on fulfilling customer needs.  They are also constantly searching for new ways to learn from customers, in addition to traditional methods.  One example is the explosion of blogs and other online communities to learn what customers are thinking, and how their demands are evolving.  Focusing on customer needs may not sound innovative, but with ever-increasing competition (in all industries), and more and more pressure on the bottom line, it will serve businesses well to invest in applications that will keep them connected to their existing…and potential customer base.  What is your company/organization doing to position itself for the long-term with regard to innovative marketing techniques?

Measuring Employee Engagement

The concept of employee engagement is successfully serving as a reminder that people ultimately drive an organization’s success.  This 3 minute video shows just how important engagement is to companies, in terms of production and overall operational costs. 

In conducting research for our upcoming paper, I am however also reminded of how difficult it is to quantify employee engagement benchmarks.  How do we properly measure engagement?  And if we are able to gain an accurate measurement, what do we do with these measurements?  Because as Paul Mastrangelo, Ph. D, states, “Our field certainly wants to achieve improvement, rather than merely understanding.” 

As I am discovering through my research process, measuring engagement appears to be synonomous with employee surveys.  But there are flaws with these surveys; not in the questions themselves, but of course, in analyzing the data that is derived from these surveys.  For example, if on a survey you were asked, “How likely are you to stay with your employer?”  That type of question, which does attempt to gauge employee satisfaction, and therefore can be viewed as a precursor to engagement, does not have much variation to it.  That is to say, an employee would most likely have the same answer today, as she would have a month from now (barring any employee who has been truly disgruntled for sometime and is looking for any reason to leave the company, or at the very least, smear it).  And conversely, another question like, “How often are you willing to work late (Salaried employees)?,” might yield much greater variation.  The answers could be different not only from day-to-day, but perhaps even hour-to-hour depending on a multitude of factors.  Both of these questions are attempting to measure the employees satisfaction level, in admittedly different ways, but analyzing the answers, which yields the crucial insights into the minds of employees, with respect to engagement proves difficult.  I certainly have my work cut out for me with this project, but I am encouraged to find there is a desire to thoroughly and accurately explore this topic, which has dynamic ramifications for all levels of management, for many years to come.

Incentive Pay Sounds Great, But It’s Tricky

Pay for performance.  It’s easy to say, and most employees would agree with its tenets, but think about these questions:  What is the individual performance criteria?  Can we properly measure them?  And maybe the most difficult question, How can we accurately measure one’s contribution to an organization?  All tough questions to ponder when considering this growing hot-topic in our number-crunching, recessionary landscape.  I am for incentive pay, but as I think about it more and more, I’m faced with the reality that it is a challenging topic that seems to have more questions than answers. 

Some of the reasons I am a proponent of incentive linked pay is that I believe hard work that yields results, should be rewarded directly proportionate to the value that has been created to the organization.  It’s fair!…I think.  Additionally, I think incentive pay motivates.  Wouldn’t you work harder if you knew that extra effort would result in a higher bi-weekly pay check?  But the issue of implementation…therein lies the challenge. 

Pay for performance.  What is performance?  Some would say performance is actually a mixture of personal competence, desire, and environment: The first two are self-explanatory, but the third suggests the idea that a “bad performer” might perform perfectly well in another environment (organization).  Perhaps the other environment provides a better “work culture”…maybe better leaders, better co-workers.  And to the question of measuring one’s contribution, maybe that depends on the industry.  But aside from a sales position, where hard data is readily quantifiable, how does an organization measure one’s worth?  Is it merely accomplishing set goals?  If so, should it be to past, present, or future goals (expected contribution)?  If goals are not met for a week, a month, a quarter…what should the employee’s minimum pay be set at?  And then there are others who offer a different shade of incentive pay, proposing that pay should be commensurate with seniority:  Those who have been employed at the company for 10 years, would be paid more than those with only 5 years under their belt.  The counter argument to this methodology is obviously that this may greatly appeal to marginal performers, but is a major turn-off to high performers, and could create low morale.

So indeed, we are left with more questions than answers.  But I am certain there is a “magic formula” somewhere out there.  Someone much smarter than myself must have an answer that is equally agreeable to both employer and employee.  An answer that would satisfy the company’s objectives…and financial statements.  One thing I am sure of is this:  Each organization should..no, must ensure that whatever equitable incentive pay structure is implemented, its method should be transparent, fair, agreed upon, and easily understood by all.