Employee Engagement Part 2- Need for Engagement

Here is the link for part 1:
http://anvesh87.blogspot.in/2012/04/employee-engagement-part-1.html

so why had Employee Engagement became such a Buzz word with organizations, especially in the recent past . Infact the word "Employee Engagement" is formally coined only in 1990's ( now don't sue me if it is not accurate) .
So does it mean that employees are not Engaged towards their work before 1990's ?.
if they are , why can't the companies continue with they had been doing for ages instead of going for some thing fancy .
Is "Engagement" a new management fad which is gonna passover with time ?

Having put so many questions , lets see whether there are answers for these questions and also as one of my profs say "back every thing with numbers", will also see what is the research done with respect to Engagement (quite a few consulting companies had done research in the topic)

If we look at the careers of our parents , i mean those who are the Generation X (born in 60s) and baby boomers (those who were born after world war 2) , we can observe a trend that most people stick to the same organization for years . The mantra here is "Job security" . organizations offered job security , pension benefits , medical benefits etc which in other way of saying you work for us for long term and we will take care of u  and employees did reciprocated with sticking to the organization for a long time

The situation has changed now . With globalization and changed business scenario, no company can guarantee an employee of a life long employement but instead the focus shifted to offering careers . It is now accepted that there would be attrition , the challenge is to retain the top performers to work with the organization for a long term and to help them perform at their peak capabilities . This is where our "ENGAGEMENT" concept comes into picture .

Now lets look at some of the outcomes of research done on Engagement:

• Towersperrin research on 50 global companies over a one-year period, correlating employee engagement levels with financial results:
• Companies with high employee engagement had a 19% increase in operating income and almost a 28% growth in earnings per share
• Companies with low levels of engagement saw operating income drop more than 32% and earnings per share declining over 11%

• Hewitt's study on 1500 companies over 4 year period:
• Engagement Level                                              share holder return
• 60-100%                                                              20.2%
• 40-60%                                                                5.6%
• below 40%                                                           -9.6% 

so it can be clearly seen that when less than 40% employees are engaged , the share holders returns are negative

there are many other studies done correlating engagement with customer satisfaction, profitability etc. Even though there might be difference in the numbers , but all studies show Engaged employees are assets to the organization and a source of competitive advantage

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Employee Engagement Part 1

Most of the employees especially those in software companies might have heard of "Engagement"  and the immediate recollection associates the term with all the get togethers, games and mails from HR on Engagement activities ...

But what exactly is engagement and why companies are interested in investing resources ( financial and intellectual) in getting the employees engaged ?

lets start with the definition of Engagement , (According to Hewitt Associates)
Engagement is the state of emotional and intellectual commitment to an organization-the degree to which you have captured the hearts and minds of your employees

There are many other definitions of Employee Engagement but the essence remains the same - An engaged employee stays connected with the organization at both emotional and intellectual and gives his best for the success of the organization

This connection happens at three levels :
Heart (SAY): An engaged employee says good things about the organization . one of the metrics to measure success here is to check the success of the company referral program ( though referral success can also depend on other factors like compensation, security etc and hence cannot be attributed to engagement alone)

Head (STAY):An engaged employee stays with the organization for long time as he visualizes his growth with the growth of the organization over long term . A caution here is that disengaged employees and poor performers also tend to stay with the organization unless until they find better opportunity else where . hence we introduce the third level "strive"

Hands(Strive): An engaged employee goes beyond his job role and flexible for the overall success of the organization.These are the employees who can see the business logic in changed job roles or work environments

Every employee have unique drivers for him to be encouraged .some of these can be generalized based on culture, demographies (ex: Gen Y employees requires more challenging work roles , though it cannot be the case with every Gen Y employee, it gives a platform to understand the employee and engage them)

In the current competitive environment when competitors can easily copy the business model , having an engaged work force is sure going to be a differentiator between successful organizations and other companies

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Pay for Performance

PAY is  one factor that shows up as both a source of satisfaction and a source of resentment among employees


Consider the scenario:
you want to attract the star talent to your company , so you pay him salary higher than the market rate .He comes and joins your organisation but the worth he brings to the organisation will very much be neutralised by the reduction in efficiencies of his team mates who compares their compensation with the new guy and gets frustrated as they are paid less than him . Now one may argue that money may not be the only motivator and good hr policies will help in retaining the employees and good performance appraisal system with clearly defined goals will make sure the employee is at desired productivity level.
But then no one can withold an employee from leaving the organisation


No matter how much you raise salaries, though, you won't generate motivation and job satisfaction, because job satisfaction is a function of the content of the job


People are dissatisfied with their pay when they feel it isn't commensurate with their efforts, is distributed inequitably,doesn't reflect the responsibilities of the job,or is out of touch with market realities.If you don't pay competitive wages,people will be unhappy and they will
On the other hand, if people feel that their pay reflects the quality of contribution they are making to their organization,and is equitable with other high-talent performers inside and outside the company,and recognizes the unique contributions that they make,then pay can be a powerful source of true motivation


what is the opportunity for real achievement and genuine accomplishment
Does my job allow me to do something that makes an actual difference?
Do i get recognized through nonmonetary means?
Do i have alot of say in how i do my job or am i totally constricted by standard operating procedures?
Can i learn and grow and develop on this job, or will i be tightening the same nut on the same bolt for the next 30 years?


Look at NGOs


If u cant satisfy people's pocketbooks, then satisfy their souls
Allow people freedom,discretion,and autonomy in doing the job
Increase the amount of challenge
keeping them engaged( this is most abused word and truly deserves a post on itself :P ) should not be of prime importance .let them be idle it doesn't matter


There might be jobs (coders in IT companies can very well connect) how well one try to be motivated there is no intrinsic fun in doing the repetitive job day in and day out . The responsibility as an effective leader is not to compensate the frustrated employee by offering him a pay raise . It might help in retaining the employee for the short term but in the long term the employee is sure to leave the organization . Rather the challenge should be in making the employees connect with the bigger picture of their actions (For ex: Soldiers in border patrol spends hours together manning and looking for intruders (which do not happen on a regular basis, but the major motivation in doing so is the feeling that they are making the country secure every single minute)


some thing on similar lines needs to be thought over for employees in organization and carefully integrate into the culture of the organization


PS: This article comes exactly a day before my final exam of Peformance management systems :P :P

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how can HR manager get top management's buy-in

Today we had a lecture on Employee Resourcing and we had done a small exercise in groups . As part of the exercise , we are required to give a speech to the company CEO in 3 mins time (in the elevator) on shifting to online testing as a suitable option for recruitment  and we are free to assume what ever data which might be important

Almost all the groups talked about the advantages in terms of reduced turnover ,better job-person fit , reduced hiring costs ,Employee satisfaction and all .

The final feedback from the faculty is that we missed on one very important data "NUMBERS" . Numbers is all that would be understood by the top management and that is what they are interested in and can understand . Even though we are free to assume data , none said that by shifting to new model of hiring we can save 30% or 10 lakhs in hiring costs . Instead every one resorted to the regular HR gyaan on satisfaction, bench marking etc

I heard the same feedback from industry persons who took guest lectures for us . So the bottom line is , if we want to succeed and be respected , its time to speak the business language and show the application of HR in attaining the business goals

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how can the reward system be improved

Just a passing thought on how to encourage the employees to be top performers

General practice in companies is to set targets at the beginning of the financial year ,conduct mid and final reviews(only time managers share the negative feedback) and group employees according to relative ratings .We also see that some where between the year most employees settle for average ratings (where most fall) and perform accordingly . But is it what the company looking for ??
so what i think is that instead of rating the employees at the year end , give each and every one of them top ratings (say 100 points ) in the beginning of the year . Now cut the points to the employees when ever employee is showing a deviant behavior and let the employee know about it (this solves one problem in conducting performance appraisals as most cases managers do not share negative feedback except in the final appraisal meeting). In this way every employee starts with 100 points and at the end ,based on relative ratings (who is able to retain the max score) would be getting the top rewards

Some important considerations are :
(1)there is a possibility that once employee falls below a certain rating compared to his colleagues , he may start loosing points more often putting less efforts as he feels he already lost his chance and worse may not be supporting the others in hope that they would also loose the points hence dragging the performance of every one down
This i feel can be resolved ,by having lee way in the system where in if the employee puts in efforts over and above what is required , option should be there to get extra points . so in this way , the employee can reach to the position from where he slid down

(2)If implemented in a team based scenario, the point system should be applied to the team as a whole instead of individuals

(3)The expectations or outcomes of the job and standards against which they are measured should be made very clear

(4) Every cut in the rating should be explained to the employee and there should be a proper grievance mechanism to address the concerns

As i mentioned this is just a passing thought and i felt its worth putting in words

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Role of recruitment in achieving business goals

Disclaimer : For simplicity sake ,i would avoid using jargons as far as possible :P

Most often we hear the cases where candidates in a job recruitment are selected for one strength , made to do the job which requires
completely new set of skills and finally conduct performance appraisal on those parameters which are not relevant to the job

The problem here is that there is no coordination between the skills looked by the person who hires, who manages the employees work and who designed the performance appraisal system. So the employee often finds in a conflicting situation where his manager asks him to do some thing which is not what his performance target says (this problem is severe when pay is tied with the performance ratings, which i wont be discussing now)

what can be effective solution:These are my learnings from my Employee Resourcing class, Readings and my personal views

What ever is envisioned by the top management should be percolated across all the levels in the organisation . So even the goals should follow the top-down approach . This in the sense , the top management generally decides how they want to position the company in the next few years , say for ex: the company wants to aggresively increase its market share for range of products

so lets see how various people and the processes in the organisation are impacted by this decission:

Top Management : Instead of saying they want to have max share in the market , they should clearly define whether they are looking at 50% share or 80% share and convey the same to the middlemanagement.From recruitment perspective , these are people who have good information on what it takes to be successful in the market few years down the line

Middlemanagement: These are the people who are in a position to influence the work force and have a good idea on customer needs . Being the managers , these people know what are the behaviors that helped their reportees to excel in their jobs and what behaviors leads to low performers. So when the goal of company is to increase the market share , the HR department should collect information from these people on characterstics of people which leads to this objective (good sales persons)

Lower level (sales people in our case) : The most important stake holders in the entire process. The incumbents in the job (especially those who are able to constantly clock good sales figures) and those mediocre people (who are recruited from other companies for star performance but slipped to mediocre sales here). Both these categories of people gives a good indication on what takes it to be succesful in the job and what are the processes that are hindering in their job ( Too much beuracracy,policies,incompetent managers,lack of training etc).

Once all the inputs are taken , the HR personnel should be able to identify all the qualifications(both technical & behavioral) required for the job

Now there are some elements in profile which cannot be trained like motivation to work. so these factors should be given more importance while recruiting . There are other factors like say specific technical knowlege which can be trained , these people can be recruited provided we have training facility and we have time to train them (Infy does this , where they clearly mention learnability is what they see and not what u already know )

Finally interviews should be done by stake holders : ie a HR manager is best person for checking the behavioral aspects where as reporting manager can check the technical skills . This step even though is followed , efforts should be made to make it fool prrof as a wrong hire costs the company a lot

well , started writing a small article but it snowballed and looks very scary now :P

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