employee engagement pres plus annotation nicholas j higgins valuentis hr directors summit jan2012...

Employee

Engagement

The truth,

the whole truth,

and, nothing

but

the truth.

Nicholas J Higgins

CEO, VaLUENTiS & Dean, ISHCM

DrHCMI MSc Fin (LBS) MBA (OBS) MCMI

HR Directors Summit 2012

ICC Birmingham

People

Science®

24th January

2012

Tour 2012

All rights reserved. No part of this presentation may be reproduced, translated, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, microfilming recording or otherwise without the express permission of the author.

Please e-mail [email protected] regarding any matters of reproduction.

© 2012

mailto:[email protected]





Due out

(finally)

2012

Audience

participation

time!

„Is there an elephant in the room?‟ (Every time you see this slide)

Employee Engagement Agenda • The Why and the What of engagement • The How of measuring engagement •Minding the gap (what’s going on here) • Engagement & organisation performance

LOGO

Organisations and employee engagement:

The 4-ball 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

Employee Engagement Agenda • The Why and the What of engagement

Source: Question posed in VaLUENTiS „skunkworks‟ output 2003

“Organisations were looking for a quick-win means of improving performance”

“Organisations were looking for a means to differentiate for hiring talent in PR terms”

1

2

3

Source: Question posed in VaLUENTiS „skunkworks‟ output 2003

Of course, this answer was based on the premise that most organisations were not optimising their people management….

• Embed an optimised people-productivity culture

• Attempt to mitigate against operational employment risk

• Means to collectively „evaluate‟ line management „competence‟ /organisational HCM

• Provide benchmark data on the „soft‟ area of operations (quasi-audit)

• Provide rationale and objective focus for management development programmes

• Means of providing intelligence and/or empirical evidence used in conjunction with other organisation performance data

Second order

(derivative)

rationale/spin-offs Source: Question posed in VaLUENTiS „skunkworks‟ output 2003

LOGO

1a Primary rationale ‘say/do/evidence’

exercise

LOGO

1b Secondary rationale ‘say/do/evidence’

exercise (limited to four)

Source: HR Employee Engagement survey 2010 HR magazine

Evidence that in fact the Primary reasons had swapped places (notwithstanding the

definitions and slightly confusing categories)

Source: Follow-on question posed in VaLUENTiS „skunkworks‟ 2003

This question proved the more difficult to answer as you see. It became more clear as more and more research was done that engagement was a concept (differing from the Macleod review definition) that had been in the making for some time, stretching back to Taylor‟s (much misunderstood work).

Employee engagement can be seen to have four levels: individual, immediate team, wider group and organisational (the micro-, macro- and meso- levels).

Most, if not all of these theories have been subject to empirical evidence and a number have received intense scrutiny. Some of the more well known ones have not always stood up to such scrutiny but remain popular because of the acceptability of the idea. A number of these theories overlap whilst some occasionally conflict as you would expect. Amongst all of the contributing authors we‟ve picked out a dozen of „the hard to ignore‟ variety.

In our view, the understanding of employee engagement became clearer to define through distilling various contributions – „standing on the shoulders of giants‟, so to speak. I‟d also point out that engagement as a concept is consistent with Kahn‟s conclusions back in 1990 – his article being acknowledged as a reference point.

As „employee engagement‟ has grown in business focus we‟ve been concerned that much published material/product on engagement has referenced so little with few exceptions. Effectively, and collectively, as a movement „we‟ve‟ been selling ourselves short, expending much energy on the reinvention of wheels, and, sewing much confusion in the process (where have we heard that before?).

Incidentally little has changed on this slide over the past ten years save more research in these subjects, notably wellbeing and burnout…….

Concept

EMPLOYEE

ENGAGEMENT

Concept

Concept

Concept

Concept

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

Also in Employee Engagement: The Definitive Guide, forthcoming

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

“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 International School of HCM

2005

‘Most productive’ meaning…individuals are:

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 likely to

commit

fraud/sabotage

Less inclined to

take days off

More inclined to

share knowledge

Our model incorporates five interlocking domains (constructs) which then provide an overall primary construct.

The five domains can each provide sub-constructs depending on focus where required.

When relating to surveys/questionnaires we remain consistent with Likert‟s original meaning of scale, i.e. not the item response format which most have come to mislabel but the use of the item response format against a defined construct….

Objectives awareness

Behaviour alignment

Role „fit‟

Performance management

Feedback

Capability

Line-of-Sight

Cultural elements

Team dynamics

Communication

Resources

Local management

Physical environment

Work Environment

VaLUENTiS 5D Employee Engagement Framework

Remuneration equity

Bonus/incentives

Benefits

Role equity

Recognition

Promotional aspects

Reward (equity) Development

Career progression

Competencies

Succession planning

Job/ Role architecture

Training/ Learning

Coaching/ Mentoring

Organisation design Performance/talent

management „Corporate‟ Leadership

Communication Decision rights

Work values Trust

© VaLUENTiS Ltd 2002-12

Organisation operating

culture

I‟ve mentioned some of the greats – one of those being Kurt Lewin. He is mostly remembered in the OD field with his forcefield analysis which has been much imitated and applied in other contexts.

Employee engagement of an individual can be though of as a daily flow of constant competing forces (vectors) affecting the individual‟s level as shown here with an illustration.

Pragmatically, organisations have tended to make use of annual employee surveys (in some cases quarterly etc) as a means of a proxy of gauging employee engagement levels; it can be thought of as similar to finance producing accounts, for example.

This type of approach provides for analysis, intervention and evaluation when looking at engagement and I expect more and more of this application as organisations finally get past „Go‟ in their approach to improving employee engagement...

Note I‟m not spending too much time on surveys and measurement in today‟s presentation.

Employee engagement as a sum of constant work

‘forces’ (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

LOGO

2 Organisation approach to defining

employee engagement exercise

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

•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

Just a quick note – some of you may have spotted that the HCM elements associated with the organisation (to the right of the diagram) bear a resemblance to our management pathfinder evaluation and you would be right. This is in fact how it came into being…..

DIVERSITY

EMPLOYEE

CENTRICITY

EMPLOYER

BRAND

HR

GOVERNANCE

HR

OPERATIONAL

EXCELLENCE

LEADERSHIP

ORGANISATION

CLIMATE ORGANISATION

COMMUNICATIONS

ORGANISATION

DESIGN

PERFORMANCE

ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT

MANAGEMENT

TRAINING &

DEVELOPMENT

796

813

742

674

615

431

487

642

628 594 603

684

657 599 416

‘Out-performing’

(world class)

‘Out-performing’

(peer)

‘Comparable’

(peer)

‘Under-performing’

(peer)

VaLUENTiS VB-HR Rating Level 2:

Management Pathfinder

Employee Engagement Agenda

• The How of measuring engagement

Lord Kelvin

Improve

business

performance

through

people

Requiring

better

distributed

leadership/

management

Through

improving

productivity

Leveraging

„positive‟

associations

/events

Minimising

„negative

associations

/events‟

Requires some

form of

measurement/

evaluation

Requires

some

underlying

construct

Requires

a

definition

Source: VaLUENTiS „skunkworks‟ simplified collective output 2003

Reverse engineering the

employee engagement

question…..

I‟ve said I‟m only going to touch briefly on surveys and measurement today and I‟ll keep my promise.

I just want to illustrate a model we introduced a few years back to highlight the potential problems with employee engagement construct and survey design.

The Y-axis represents the breadth and balance of items (what we call question-statements) included.

The X-axis represents the design and balance of the statements themselves and the response format chosen.

The model shows four potential outcomes – only one of which is useful.

We would urge organisations to always check their design, whether provided internally or externally. Coming up short on either axis is undesirable.

The last thing you want is to base interventions on potential G-I-G-O „blind‟ scenarios…..

LOGO

Survey instrument design & measurement expertise

HC

M s

ub

ject

mat

ter

exp

erti

se

HIGH

LOW HIGH © ISHCM 2006

The employee survey expertise model

LOGO


HC

M s

ub

ject

mat

ter

exp

erti

se

Myopic

Result: misleading or erroneous

interpretation

20/20 Foresight

Result: organisation has sufficient in-depth, robust

knowledge to act upon

Unfocused

Limited insight due to limitations of HCM knowledge

Blind

Result: end up with ‘garbage in-garbage out’ syndrome

HIGH

LOW HIGH © ISHCM 2006


LOGO


HC

M s

ub

ject

mat

ter

exp

erti

se

Myopic

20/20 Foresight

Unfocused

Blind

HIGH

LOW HIGH


16%

25% 51%

8%

Sample: 147 employee surveys. All organisations with over 750 employees. ISHCM research team. Study carried out 2006-7

LOGO

Objectives awareness

Behaviour alignment

Role „fit‟

Performance management

Feedback

Capability

Line-of-Sight

Cultural elements

Team dynamics

Communication

Resources

Local management

Physical environment

Work Environment

VaLUENTiS 5D Employee Engagement Framework

Remuneration equity

Bonus/incentives

Benefits

Role equity

Recognition

Promotional aspects

Reward (equity) Development

Career progression

Competencies

Succession planning

Job/ Role architecture

Training/ Learning

Coaching/ Mentoring

Organisation design Performance/talent

management „Corporate‟ Leadership

Communication Decision rights

Work values Trust


Organisation operating

culture

Y-axis: Breadth and balance of coverage required

I. Leading questions

II. Double barrelled/multiple questions

III. Knowledge or projection (proxy)

IV. Response extremity

V. Responses open to social desirability/prestige

VI. Responses implying causality

VII. Questions that impose unwarranted assumptions

VIII. Questions that include hidden contingencies

IX. Questions that include ambiguous time periods

X. Questions containing concepts that are open to differing interpretation

XI. Question that duplicates another or is a reverse of another

XII. Questions requiring a tendency to acquiesce and/or imply „psychological threat or hostility

XIII. Questions that are exclusively positively or exclusively negatively clustered

XIV. Questions which are culturally loaded and or overly long

Q-S (question-statement) design error

typology: avoiding the pitfalls

Source: VaLUENTiS QS methodology 2003

LOGO

3 Parameter ‘say/do/evidence’ exercise

LOGO

4 Employee Engagement construct

parameters exercise

LOGO


•Minding the gap (what’s going on here)

Knows what to

do/achieve

but unlikely to

achieve it

More likely to

have

performance/

capability

issues

Likely to have

performance,

attitudinal

and/or

behavioural

issues

Could do

more

Job gets

done

More likely to

have objective

and/or „potential‟

issues

Fully

productive

Less than

optimally

productive -

Could do more

„well‟

High probability

of wasted

effort/

frustration

Individual‟s

degree of

Alignment

Degree of

Commitment Affective Continuance

Incongruent

Fully

congruent

Staff engagement:

The challenge for organisations

“Only one box in

nine reflects the

constant „high

bar‟ challenge for

organisations in

optimising

engagement

across the

workforce on a

daily basis”


Engagement responses:

‘The Good The OK and

The Ugly’ •Work and sense of personal accomplishment

•Pride in working for the organisation

•Opportunity to utilise skills

•Adequate training to perform the job

•Personal values/company values aligned

•Honesty and integrity in business activities

•Accurate evaluation of performance in last appraisal

•Company doing a good job in providing opportunities for advancement

•Well-being of employees when management make important decisions

•Senior management in touch with everyday issues

•Equity of being paid compared with others in other companies who hold similar jobs

•Clear communication of rationale behind promotion and career development

•Physical working environment

•Adequate resources to work effectively

•Company values visible in the day-to-day activities of my team

•Receiving recognition for doing a good job

•Understanding how to get promoted

•Equity of being paid compared with others in organisation

Scoring high

Scoring midrange

Scoring low

Source: VaLUENTiS Engagement database, collated since 2004

Please note: Actual Question-statements paraphrased for the purposes of this slide

• Managers are significantly under-qualified compared to other professional

occupations: 41% of managers hold below a Level 2 qualification…….

• …..Just 38.5% of managers and senior officials are qualified at level 4 and

above, compared to 80.9% of those in other professional occupations.”

• “It is estimated that the proportion of managers with management-related

qualifications will not get much above 20 per cent in the longer term at the

current rate of achievement……..

• ….. The literature review revealed that there is a growing body of evidence

showing the impact of not only management skills but management

qualifications on productivity.”

Source: The Value of Management Qualifications, Chartered Management Institute 2007

Management – just how many have a ‘license

to manage’....?

We along with others recognise the big factor in employee engagement – namely line management.

What perhaps is not so recognised is the issue of engagement with individual managers themselves.

It is extremely unlikely that highly engaged employees will be found working for managers who have low engagement themselves. And even if they did – it wouldn‟t be for long.

We recently took a random sample of manager engagement scores from our database to provide a picture. The next two slides show the same data in two different formats – the bell curve and percentile histogram.

I don‟t have time today to go into great detail but I would ask you note the 1 in 7 managers whose score is more than 1 (negative) standard deviation from the norm.

In this sample, 1 in 7 managers equates to about 3000 employees. That‟s a serious concern…………….

‘Line Management’ engagement scores ‘bell curve’

Management cadre sample 2010-11

Sample size: 1400 managers

(employee population: 20,000)

Score range 200-1000

Source: VaLUENTiS Engagement database

14.5% below 1sd 13.9% above 1sd

738 1000 200

‘Line Management’

engagement score by

percentile (same study)

910

860

813

790

760

Management cadre sample 2010-11

Sample size: 1400 managers representing 20,000 employees

Score range 200-1000 Source: VaLUENTiS Engagement database

The theory states that monitoring and maintaining urban

environments in a well-ordered condition may stop further

vandalism as well as an escalation into more serious crime.

The theory states that monitoring and maintaining work

environments in a well-ordered management condition may

stop further engagement erosion as well as an escalation into

more serious disengagement issues.

Applied to engagement…

The ‘Broken Windows’ hypothesis

One other interesting application re line management I‟d like to touch on today – the „Broken Windows‟ theory.

Some of you may be familiar with this – particularly if you‟ve read Malcolm Gladwell‟s „The Tipping Point‟. The actual research dates back to 1982 with Wilson and Kelling‟s work (and later Kelling and Coles) – the central tenet being that the monitoring and maintaining of urban environments in a well-ordered condition may stop further vandalism as well as an escalation into more serious crime; i.e. broken windows beget more broken windows etc.

Though the theory has come in for some criticism – notably Harcourt, it remains a powerful concept.

And thus for a moment I‟d like you to conceive the Broken Windows metaphor applied to line management, switching a few words for appropriateness.

Rather revealing? And maybe useful for organisation messages.

Thus the manager who keeps, for example, (i) postponing an individual‟s appraisal, (ii) late with signing off expenses, (iii) taking time off him/herself at short notice whilst not tolerating others in the same manner, (iv) not confronting a persistent lateness offender, (v) not instilling office tidiness and so on………well you get the similarities……I‟m sure you can identify with many more……….

And whilst we‟re on the subject of line management and „license to manage‟ - here‟s some common problems and some suggested fixes.

The question is do you recognise these and what fixes are taking place, or aren‟t they?

The ‘people competency’ of line

management......

...common problems • Lack of understanding across

managers as to what good people management is and its impact

• Varied mix of line managers with variation in people practice and resulting issues

• No set bar to becoming line „people manager‟, i.e. no „license to manage‟

• Too many „B‟-players in managerial positions who limit employee engagement potential

• Too often, HR as „personnel function‟ compensates for deficiencies

...‟fixes‟ • Clear communicated framework of

good people management practice together with learning exposure

• Utilise management competency platform with structured programme of learning and assessments

• Adopt „license to manage‟ standard with appropriate hurdles and gradings

• Instigate talent assessment where necessary, with career option route-paths including exit

• Assess if issue relates to culture, vague role definition or both, in conjunction with above actions

LOGO

5 Management fix-implementation exercise


• Engagement & organisation performance

The traditional view of employee engagement

contributing to improved organisational

performance...

Higher

employee

engagement

Higher

productivity

Higher

organisation

performance

The emerging view of human capital management

practice and employee engagement contributing to

improved organisational performance (as a system)

Higher

employee

engagement

Higher

productivity

Higher

organisation

performance

More effective

human capital

management

However, remember the converse.....

Lower

employee

engagement

Lower

productivity

Lower

organisation

performance

More ineffective

human capital

management

So how do organisations go about improving employee engagement in a coordinated coherent manner?

A very good question. Most case studies, or more precisely mini-case study capsules provide little insight („the more and more providing less and less‟).

When we refer to case studies we refer to the Harvard-types used at the School (ISHCM) or sometimes in our management workshops where much more learning takes place.

Thus, increasingly, we‟re finding the „EE playbook‟, or „Definitive EE playbook‟ giving its correct name, of great value.

The book in itself doesn‟t necessarily have to exist per se but the contents do.

I‟ve shown an example EE playbook on the next slide and examples of operating EE system models, including the original Sears model which is now almost 20 years old and how these types of models have advanced. Again I don‟t have time to go into great detail today but you get the gist of what‟s its about.

I‟d like to think all HR departments have one though preferably it should be distributed around the organisation. It‟s the symbolism here that counts as much as the detail.

The ‘Definitive EE’ Playbook

Incentives

Performance

appraisal

Goal

alignment Team

development

Role design

Managing

conflict

Leadership

Work environment

P

E

R

F

O

R

M

A

N

C

E

What organisations (HR) keep getting

wrong (this is a short ‘shortlist’)…

Mo

dels

S

trate

gie

s

Imp

lem

en

tati

on

L

ea

rnin

g

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

10. Engagement Transformation Programme (ETP) methodology

11. Core applied theory summary capsules

12. Human Capital Management framework

EE playbook 4

A look back at The original Sears

‘system’ model…

Internal

service

quality

Employee

Satisfaction

External

Service

Value

Customer

Satisfaction

Customer

Loyalty

Revenue

Growth

Profitability

Employee

Retention

Employee

Productivity

Putting the Service-Profit chain to work Heskett, Jones, Loveman, Sasser Jr & Schlesinger

Harvard Business Review Mar-Apr 1994

Human Capital

Practices

Human Capital

Practices External

Value

Proposition

External

Value

Proposition

Customer Satisfaction

Patient Satisfaction

Customer Loyalty

Patient

experience

Revenue Growth

Quality of

services

Profitability Use of Resources

Employee Retention

Staff

Retention

Individual/

team Productivity

Individual/

team Productivity

„ Local‟ Management

„ Local‟ Management

Cost control Cost control

Compliance Compliance

Portfolio mix Safety

X - selling Clinical

treatment

Service Patient focus

Work values Work values

Line - of - sight Line - of - sight

Development Development

Reward Reward

Work environment Work environment

Employee

Engagement

Staff

Engagement

Leadership &

governance

Leadership &

governance

Shareholder value

Trust

performance Employer brand

Employer brand

© VaLUENTiS VBM Analytics methodology 2008-12

Portfolio mix Prompt service

X - selling Environment

Service Community

Example „Macro‟ model NHS version 1.20

Moving on from the Sears model…

LOGO

6 Employee Engagement: Organisation

reality exercise

Source: HR Employee Engagement survey 2010 HR magazine

We could spend a whole day just on this slide (but we’re not!)……

Now you‟ve hopefully been completing the „quick and dirty‟ mini–exercises along the way.

By now you should have a (little) more informed view of where your organisation (or chosen organisation) is?

And so, to return to the beginning and the 4-ball model – the question is where is your organisation?

PLAY-DOWN

PLAY-ACT

PLAY-SAFE

PLAY-MAKE?

Your initiation has begun………

Thank you.

LOGO

Organisations and employee

engagement 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


• The truth • The whole truth •And nothing but the truth (well as we see it, anyway!)

Thanks for participating……