Employee Engagement ROI: Don’t Set The Bar Too Low
Nobody’s disputing the value of an engaged workforce. Decades of research prove a connection between performance and employee engagement. The problem is so well documented that The Economist estimates 87 percent of C-suite executives recognize that disengaged employees are one of the biggest threats to their businesses.
As a result, there’s a billion-dollar industry that produces employee engagement surveys that ask employees if they’re “proud” to work for X company, if they enjoy working for their supervisor, if they’re satisfied with their jobs, and if they’d refer somebody else to come work for X company.
A low-performing employee could answer “yes” to all those questions — without doing anything to drive improved financial performance for the company. Most of these surveys give CEOs no insights about how to engage their employees or how engaging them will improve performance.
Judy Pearce is an HR consultant and attorney with extensive experience helping Silicon Valley companies develop HR functions once they outgrow their startup status, beginning with Google in the 1980s.
“The workplace playgrounds of Silicon Valley are legendary,” says Pearce. “Companies can spend a lot of money trying to make their people ‘happy’ without achieving what they really want, which is keeping their people engaged in the company’s mission and performing specific tasks exceptionally well.”
If There’s No ROI, Why Bother?
If you’re only measuring employee satisfaction as your metric for an engaged workforce, then you’re really setting the bar at your waist. Companies that use employee satisfaction as a measure of engagement are rarely satisfied with the return they’re getting on their investment — if they’re measuring ROI at all.
The Incentive Research Foundation recently reported that while 89.3 percent of companies surveyed indicated that goals/objectives are used to determine incentive payouts, only 52 percent assessed return on investment.
CEOs who think employee engagement is a “feel-good” initiative are falling short in the results they could be achieving. There should be an absolute measurable ROI to any employee engagement program, whether it’s slowing attrition, increasing sales, or improving customer satisfaction.
What Are You Trying to Achieve?
While it’s tempting to purchase an “initiative in a box” – where a program that’s worked at a company in a different industry in a different part of the country and with a different workforce is presented to your employees and “engagement” is checked off your to-do list – custom discovery is key.
At most companies, it’s not unusual that the top 10-15 percent of employees are the same reoccurring overachievers day in and day out in their responsibilities while the other 85 percent are somewhere between going through the motions or disengaged completely. Identifying the inherent behaviors and disciplines that lead to the success of those same 10-15 percent will look very different from one company to the next.
Many companies worry more about what prize their employees can win than the daily behaviors they want their employees to exhibit in order to achieve that award. Ingraining behaviors, rewarding behaviors, and spotlighting those behaviors until they become habitual to the employee should be part of every workforce engagement initiative.
Site visits and employee interviews are some of the methods engagement consultants use to get the information needed to create a blueprint for a sustainable engagement program. Once that work is done, companies can start to think specifically about what incentives/rewards will actually inspire the employees to not only learn but actually adopt the strategy on a daily basis.
Many organizations don’t understand that you don’t have to spend a lot of money on the actual reward itself — and that the prize itself is only part of the experience. The real “it factor” is how and when you recognize the employee. Don’t get so focused on the incentive you’re going to offer that you lose sight of what you’re trying to achieve.
Measurable ROI: A Case Study
Business Impact Group (BIG) recently conducted an employee engagement program for a 100-store grocery chain where management described uneven results from stores located in similar geographies serving similar customer demographics.
As a first step, BIG performed “massive” discovery at the chain’s top- and bottom-performing stores. With a good idea of the managerial behaviors that led to success at the top-performing stores, a pilot was tested at four randomly selected stores where managers were coached in the behaviors used at top-performing stores — and rewarded for completing learning on BIG’s engagement platform. At the end of the three-month pilot, the test group showed a 54 percent increase in comparable store sales.
What management noticed was that store managers had begun acting like true leaders. The BIG process taught them behaviors that were not only measurable, but engaging. They had battle-tested two or three other programs that did not work, and today, the BIG process is being rolled out across the company.
Wholehearted Brand Engagement
Branding today goes beyond your logo and tagline. It’s also the way your staff represents your brand – both on and off the job. Engaged employees are excellent brand ambassadors, but there’s no such thing as permanent engagement.
Examine your engagement touch points from end to end and look for areas where you can up your game.
Learning: Do your employees have in-depth knowledge about your products and the confidence to articulate their benefits? Do they know how to ask for a sale? If they don’t, how are you going to educate them? How are you going to reward them for their learning?
Rewards: Are the recognition and rewards you’re offering your employees appropriate? Do you let them choose something they’ll like — or what you want them to have?
Branding: Are your employees brand ambassadors on and off the job? Do your uniforms help them look and feel like a million bucks?
Successful companies provide the most engaging workplaces — because employees feel they’re contributing to something with potential. That’s why engagement should be part of your daily culture – not just a sales contest or feel-good initiative.
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