A recent McKinsey Quarterly article titled, “Question for your HR chief: Are we using our ‘people data’ to create value?” (March, 2011) addresses some of these concerns.  One of the key takeaways from the article is that business results may be more a function of an organisation’s talent strategy than originally thought.  For example, Microsoft has been conducting studies on top performing employees to investigate if there is any correlation between their performance and the schools and companies these employees hailed from.

Whilst these types of research projects are large scale, there are far easier insights to be garnered from data most organisations have at hand.  This was another key point in the McKinsey Quarterly article, “Start with what you have”.  Having conducted Employee Engagement Surveys for many organisations, The Right Group knows there is plenty of good data out there.  Employee Engagement Surveys provide key data on an employee’s willingness to promote their organisation (act as an advocate), apply discretionary effort when completing tasks (exceed expectations), and their commitment to the organisation.  However, these surveys can also provide data about what makes an employee satisfied through measuring those extrinsic factors that an organisation must provide as a minimum.  These include relationships with managers and colleagues, remuneration and benefits, work-life initiatives, and job security to name a few.  At the same time the survey measures those intrinsic factors that motivate an employee.  These can include career progression, recognition, sense of achievement and empowerment.

The third key point from the McKinsey Quarterly article was the need to focus HR analyses on business priorities.  For example, the overall employee engagement score should be investigated to see what linkages it holds with organisational profitability.  That is, do peaks in profitability occur in parallel with peaks in employee engagement levels?  Other answers may also be found by understanding which extrinsic factors have the greatest effect on employee retention.  Do favourable results in employee’s relationship with managers and colleagues help explain the low levels of staff turnover?  A final example of how HR data can be better used is in investigating what affects sales performance.  Looking at motivation factors like sense of achievement and empowerment may provide an indication as to why personal sales targets are not being met or exceeded.

These are just a few examples of the potential of HR data.  On a much larger and longitudinal scope, IBM is trying to better understand what their workforce will need to look like in the long-term.  It was reported in Business Week (March, 2009) that IBM is leading the way in studies that attempt to map the skills and experience of their entire workforce.  They also study emerging trends in technology and economic activity and match these together to predict what skills they will need in tomorrow’s competitive environment.

It was reported in Business Week (March, 2009) that only 1% to 2% of large corporations are estimated to harness HR data to evaluate their workforce.  With the data potentially at any organisation’s finger tips, the next priority for any high-level discussion is to address how HR professionals and business leaders can work together to provide better insights in business performance by perhaps starting to be more “people focused”.

One of the early researchers on employee engagement William A. Kahn (1990) describes engagement as an employee expressing themselves physically, cognitively, and emotionally during role performance. By today’s definition, employee engagement measures to what extent employees are prepared to ‘buy into’ an organisation and to demonstrate emotional and behavioural commitment to seeing the organisation succeed. As researchers, we are able to measure the level of engagement demonstrated by employees in their role using three key factors: an engagement index, hygiene factors and motivation factors.

Engagement Index

This measure provides an indication of the overall level of engagement within your organisation.  It is an index score based on responses to questions on the following three items:

1. Promote – The extent to which employees promote your organisation as an employer and as a service provider to their friends and family, basically the extent that an employee acts as an advocate for the organisation;
2. Commit – The extent to which employees want to remain long-term in order to bring about the organisation’s vision; and
3. Exceed – The extent to which employees are inspired to go above and beyond what is expected of them in their daily work, that is, to apply discretionary effort.

These scores are then collated to given an overall engagement index score. Our research has shown that employees tend to be more likely to promote the organisation they work for and less likely to apply discretionary effort to exceed expectations. Commitment to the organisation tends to rank last.

Hygiene Factors

These are the extrinsic features that an employee expects will be available as a minimum for them to be satisfied with their current employment situation. Hygiene factors include (but are not limited to) remuneration and benefits, job security, relationship with immediate supervisor and colleagues, corporate leadership, work and family initiatives and organisational policy.  It is only after an employee’s expectations regarding factors like these have been met that an employee can take their levels of commitment and motivation from satisfied to engaged.

Motivation Factors

These are the internal conditions relating to the nature and type of work the employee performs. Motivation factors have the potential to fulfil an employee’s need for achievement, competency, status, self esteem and personal realisation. Motivation factors include alignment with organisational values, interesting and challenging work, sense of achievement, career progression and development, recognition and employee empowerment. The fulfilment that arises from meeting and exceeding an employee’s expectations regarding these factors is essentially the antecedent for engagement.

However, measuring engagement is not just limited to these three components.  A degree of customisation is available to organisations wishing to explore additional drivers of engagement.  For example, organisations may wish to gather information on perceptions of role clarity and responsibility or whether employees feel they have clear goals and targets that meet the organisation’s own strategic objectives.

Measurement of employee engagement is more than just understanding what the right drivers are that influence employee happiness, motivation and productivity, it can also provide management with an insight into why the organisation is potentially not meeting its strategic goals.

The primary advantages of using an external provider include:

• Impartiality: An external provider is likely to be more objective and unbiased when developing, conducting and analysing employee engagement research. External providers tend to have fewer pre-conceived notions about what should come out of the research findings than the business/organisation will have about itself. An unbiased research process will ensure that the research covers all aspects of employee engagement and satisfaction, not just areas of positive performance which managers may be keener to concentrate on if conducted internally.  
• Respondent Anonymity: Employees are more likely to give their true, unfiltered opinions if they do not know or have no connection with those reading the answers they give.  If a company is conducting the research themselves, employees may feel less anonymity; for example that their manager would know their individual responses. This encourages respondents to give more socially acceptable rather than truthful answers or can even discourage participation entirely.
• Ability: An external provider is more likely to have the required skills and resources to carry out robust research than a business/organisation that does not specialise in research. Developing methodology, conducting and analysing research requires time, knowledge and skills that may simply not exist in the business/organisation or does not exist at a level required for producing reliable and useful research findings.

Probably the most significant disadvantage of outsourcing employee research will be the cost involved in using an external research provider. The cost of the research project will need to cover time and expertise required in the development of the research approach (questionnaires, setting up surveys/interviews, client communications etc), the actual conducting of the research (telephone/mail/online survey, reminders) and the data analysis and reporting stage. These costs are tangible and easy to weigh up in terms of whether the company can or wants to afford the research.

Although there are obvious costs in using an external research provider for employee research, doing the research internally can also prove costly in less obvious, yet nonetheless important ways. For example, there is the need to commit time and resources to the research that may usually be dedicated to the business/organisation. There may also be costs in terms of acquiring the knowledge and resources to analyse the research and understand what it means (training, statistical programs).

Most importantly, another cost to consider by doing the research internally is that poor research will lead to poor decision-making: in terms of employee research, this poor decision-making may diminish the opportunity for positive change in employee attraction and retention. Given that issues can occur with impartiality, respondent anonymity and ability to conduct robust research when conducting employee research internally, the quality of internal research may be compromised. A lack of robust research will result in employee’s wants and needs not truly being understood and thus not being addressed, leading to attraction and retention problems that remain or even increase.

So whilst it may initially appear that conducting the research internally will reduce costs, the actual cost to the organisation/business could end up being far higher. It pays to carefully consider whether the short-term saving made by doing employee research internally is worth the potential long-term cost.

Addressing the psychological needs of your employees is equally as important as their physiological needs.  Employees are motivated by at least three psychological needs (Nohria et al 2008);

1. The need to Acquire – social status, position/job title, responsibility.
2. The need to Bond – be connected with your peers and superiors.
3. The need to Comprehend – understand your work environment and any recent changes.

Research indicates that organisations often meet the obligatory demands of human resource management such as occupational health and safety, non-discrimination, non-sexual harassment and workplace equity.  However it would appear that firms are failing to attend to the psychological needs of their people. Acquire, bond, and comprehend are needs that are commonly unfulfilled in workplaces.  Thereby reductions in employee motivation and employee disengagement are often observed.

Employees often comment that workload and stress levels contribute significantly to job dissatisfaction.  Employee engagement is also reduced when employees are not acknowledged through career development and promotion, especially if they have recently worked on stressful projects.  Through our own employee engagement surveys, employees correspondingly mention that they do not see themselves remaining with their current employer in the long term.  Communication between employees and supervisors can also be ineffective when people are spread across geographical bases.  This makes it a challenge for employees to become familiar (and bond) with supervisors and colleagues.  If employee communication is ineffective, employees will not be able to comprehend changes in management or corporate branding, leading to disenchantment.

Leading Brand and Organisational Development consultancy, The Right Group, recommends addressing these three psychological needs that employees have and implementing an internal communication strategy that ensures employee engagement and motivation:    

1. Communicate to acknowledge: ensure that employees are acknowledged on a regular basis. Make appropriate promotions and offer additional responsibilities to employees that show competence and capability.
2. Communicate to connect: make employee engagement and dialogue a routine activity so that there is a facilitated connection. 
3. Communicate to ensure understanding: not only inform but routinely consult with personnel encouraging a two-way engagement process in company information and changes.

There is a need for clear solutions that organisations can readily implement.  Given that all firms are different, tailored employee engagement programs can delineate which psychological need is not being met within your internal branding efforts.

The core theme for productivity here is just how engaged your employees are in their role.  Engaged employees are fully involved in, and enthusiastic about their work.  They care about the future of the company and are willing to ‘go the extra mile’ (i.e. exceed the level of expectation) to ensure success.  

Engagement therefore has much to do with how individuals apply themselves to the performance of their job.  Leading employee engagement advocates support this by suggesting that real engagement is when an employee is ‘psychologically present’ when occupying and performing an organisational role.

Case studies from the US  highlight the practical significance of having an engaged workforce so suffice to say, measuring employee engagement is crucial, and should happen fairly regularly across any sizeable business, (at least annually or every two years).  So, how does an organisation know how engaged its workforce is? 

There are many survey instruments available to capture this data.  By conducting an Employee Engagement Survey, your organisation will seek to identify opportunities for improving organisational effectiveness, increase employee commitment, and satisfaction.  Moreover, Employee Engagement Surveys can be tailored to your specific organisational needs. For example, an organisation might wish to measure industrial issues, health & safety, procedural justice and fairness in treatment, and the generally deep-seated silos, cultures existing across the different departments.  Other critical success factors which can be measured and evaluated include internal communications, leadership, and teamwork.

It is worth noting the distinction between Engagement and Satisfaction.  Employees can be satisfied with their jobs, but not necessarily engaged.  This is where an Engagement Survey instrument is very important and unique as it measures three essential constructs of engagement being:

1. Discretionary Effort’
2. Employee Advocacy; and
3. Intention to Stay.

Another aspect of conducting an Employee Engagement Survey, possibly one of the most important, is the need to ensure impartiality and confidentiality.  Employee Engagement Surveys are best run independently by an outside party from your organisation for two reasons.  First, it is for confidentiality and to protect the identities of respondents from any reciprocity which may arise out of possible identification.  Secondly, organisation-wide buy-in to the survey and impartiality will improve your chances to elicit much more open, honest and considered responses and feedback from your employees.  It also positively influences the degree to which your employees trust the findings and how outcomes will be relayed back to them.

Leaders and Managers must actively identify engagement levels within their organisation, to show duty of care and highlight the reasons behind an ostensive lack of engagement, in order to strive to eliminate these factors and implement strategies to facilitate higher levels of engagement from their workforce.  Employee engagement is hard to achieve, especially as it relates to emotion and behaviour.  One size does not fit all.  If engagement is not sustained, your organisation will feel its effect so to keep abreast of these issues, use an Employee Engagement Survey as your starting point for positive change.

On the other hand, engaged employees who are satisfied and committed will continuously strive to foster a motivated environment and have their hard work rewarded. They’ll take personal ownership of the company brand and their customers’ experience. Happy employees are a great source of valuable word of mouth advocacy and goodwill. It is crucial that before an organisation looks to concentrate on elevating customer satisfaction levels, the employee level of satisfaction needs to be addressed first. Do this through great communication, listening, focusing on the good and training & development of your people. These are all important facets of a robust and effective employer brand.

Satisfied employees help to retain happy customers

Studies show that there is a direct link between satisfied employees and happy customers. On average, losing one dissatisfied employee necessitates investing approx 150% of their yearly salary on advertising and logistically arranging for that replacement (training new people, lost productivity, stress and additional duties of the remaining team while they compensate for the absent team member or wait for the employee to be up to speed). When this loss of an employee is Management, this number can increase to nearly 200%!

It makes good business sense therefore, to research and invest in your team’s engagement levels. Determine whether their needs are being met for them to stay loyal and satisfied. Hence, creating an environment of engaged and helpful people, who are ready to go the extra mile for the customer will result in increased productivity, satisfaction in the workplace, and strengthen loyalty to the brand and business.

From the customer, internal employee satisfaction means a more stable, responsive team addressing their needs and concerns. Customer loyalty, like employee loyalty, stems from strong interpersonal connections; we deal with people we know and like. Customers like responsive, open communication which builds up trust. Customers are tuned into the idea that they, too, would be missed if they were to go elsewhere; definitely the case, not only because of what they invest but moreover because of who they are and how they advocate ongoing goodwill for your business.

Running an employee engagement survey provides you with a very sound overall picture of a company’s strengths and weaknesses. The asking of “why” in such research gives your people an opinion (voice) and management receive very valuable insight into the existing business and its future.

This survey, as an Audit process allows your company to further develop its Company and Employer Brands, to ensure a stronger culture of loyal, committed employees and customers. It will allow Managers to focus attention on initiatives needed to further create happy, contented employees, who you can guarantee your customers will follow.

Engaged employees display contentment – this permeates across to customers (where the brand, its revenue and the customer experience/loyalty generally are always at stake). Also critical to having engaged employees is giving them ‘voice’.    Getting employee feedback plays a vital role with helping companies increase their employee retention. Organisations need, therefore, to measure satisfaction and the levels of engagement of their people.  

Implementing surveys and creating other feedback imperatives whilst encouraging employees to engage in continued dialogue, also highlights common themes impacting across the culture/fabric of an organisation, some of these an executive management team may remain blissfully unaware of. Organisational voice negates employees’ perception of being a dispensable, interchangeable part of a company (i.e. it emphasises that person’s role as vital to the collective, and promotes a feeling of influence and sway in helping to shape the company and its future.  This ultimately only deepens their ongoing commitment to that company and encourages wider, proactive dialogue.                                                                                                                       

Many senior managers just assume employees are satisfied and engaged; somewhat of a short-sighted, ‘head in the sand’ approach. Running online employee engagement surveys determine with greater certainty employee sentiment. It takes an accurate pulse check on morale, key trends, and patterns of hygiene and motivational factors impacting on the business such as clarity of roles, responsibilities, job satisfaction, collegial work environment, intention to stay, to advocate your organisation etc.

For obvious reasons, engagement surveys are best run independently of the organisation requiring the research. Confidentiality of the process and protecting the identities of respondents from any reciprocity or demeaning action arising out of possible identification is paramount. With an organisation-wide buy-in to the survey process, this independent impartiality results in the ability to elicit much more open, honest and considered employee feedback. It also has a positive influence upon the degree to which employees trust the findings and outcomes relayed back to them.

Your organisation has an Employer brand. The big question is… ‘is it the one your organisation wants and does it accurately reflect the reality of working for your organisation?’

To be successful, organisations must aim to build an authentic Employer Brand where the external and internal brand messages link to the employment experience.   Shaping these positive perceptions takes times; it requires much more work than simply developing jazzy recruitment marketing initiatives and/or communications.

Make the decision that your Employer Brand is strategic – it’s more than just recruitment advertising and catchy statements on a career website, it impacts on culture. As a CEO, or organisational HR professional you must consider a framework that will strategically build a sustainable employer brand position.  A recommended pathway includes the following five phases:

1. Audit & Analysis – define your organisation’s people strategy and understand current internal and external perceptions of your organisation as an employer.
2. EVP Strategy Development – develop your unique Employee Value Proposition statements and employer brand positioning.
3. Testing & Validation – test and validate the proposed employer brand across divisions, regions, countries.
4. Alignment & Communication – close the gaps between strategy and organisational reality and internally, then externally roll it out through communications.
5. Management & Metrics – set up internal and external metrics to track improvements and alignment with key strategy.

The world’s most powerful brands are built on insight and knowledge – and as such, the Audit & Analysis or research and data gathering phase of the process is critical in determining whether your employer brand will be compelling and successful.

Why is Audit & Analysis Important?

Many management teams believe they already understand their employees.  Understanding the explicit needs and aspirations of your employees is the place to start, surveying to interpret their needs within the current organisational and labour market context.   Many companies do this conducting employee surveys measuring employee sentiment and the prevailing mood within the organisation.  Key however in the Audit and Analysis phase is to really understand the unique drivers of engagement and commitment within your organisation, how this compares to the needs and aspirations of your target candidates and how competitive your overall employment value proposition is, relative to that offered by competing organisations.

Without a strategic investigation such as this, you risk developing an Employer brand that’s not competitive, isn’t reflective of true sentiment within your organisation and will not then effectively attract and engage the type of talent you seek for highly successful operations.

Typical Key Findings

Audit and Analysis findings generally diagnose gaps between perceived and current ‘reality’ i.e. the gap between what managers and leadership think, and actual employee experience. If the aim is to create an ‘authentic’ Employer brand then a compelling employment value proposition (EVP) needs to be developed, and those gaps closed.

Armed with key internal and external insights, your organisation now has the key information required to develop a unique and competitive EVP that can be owned by the organisation.

Where are your Information Gaps?

Review the following questions to identify your Employer Brand information gaps: 

• How will a stronger employer brand support your organisation’s operational strategy? 
• How will a stronger employer brand support your organisation’s people strategy? 
• What do employees currently regard as particularly characteristic of and distinctive about your organisation?
• Do your people have a strong sense of the organisation’s purpose and values and how much of a gap there is between stated ideology and what people actually experience?
• How highly do your employees rate your work environment and current HR processes i.e. learning and development, quality of management, internal communications, work-life-balance policies etc?
• How would your employees describe the key benefits (functional and emotional) if working with your organisation?
• Why do your employees choose to work for your organisation? 
• Are your people policies in line with current / future labour market trends?
• What perceptions does the labour market hold of your organisation, as a place to work for?
• What is your current Employment Value Proposition and is this sustainable for the future?

As a knee jerk reaction to current economic times, many organisations have automatically tightened the budget belt and are shedding employees. Both of these activities have an impact on employee morale and engagement which in turn can have a significant impact on business performance. So when the business agenda is focused on business optimisation, ‘managing’ your workforce should be a business priority.

So what is currently driving this hesitation towards surveying employees?

• Fear of knowing how your employees actually feel about their current employment experience?
• Concern that your employee’s feedback will be negative as a result of recent redundancies?
• Indifference towards employee surveys as historically your organisation doesn’t address the issues and simply shelves the report?
• An inability to drive the required change.
• Senior management apathy regarding the importance of listening to employees.
• Budget and resource constraints.

Employee surveys can actually be a valuable business tool if they are properly utilised. As organisations attempt to do more with less employees, it pays to know how your organisation can improve the work environment and the productivity of employees.

Tips to consider when conducting Employee Surveys:

1. Set clear objectives and measurable goals as to what you want to achieve from the employee survey at the outset.
2. Communicate with your workforce why the survey is being conducted and the importance of their participation. Briefing your management teams will help to boost employee participation.
3. Make it easy for employees to complete the survey i.e. online and paper based options.
4. Include an employee engagement measure in the survey to measure more than just job satisfaction. Also choose a survey instrument that will identify the factors that will most impact your employee engagement.
5. Use benchmarks – either selecting strategic internal benchmarks or utilising industry benchmarks to compare your organisation’s performance.
6. Actionability is the key! Use a provider who doesn’t just provide tables and charts but can interpret the data and help you develop more effective people, organisational and business strategies.

From our experience working with clients, overcoming initial employee scepticism of “why a survey is being conducted, and “what’s the point in responding” is an upfront consideration which must be overcome. Similar to soliciting feedback from customers, employee feedback is equally as important. The bottom line is not to ask for feedback unless you are prepared to listen and act on it.