The Case Against Engagement

Employers and experts are increasingly questioning the validity of employee-engagement surveys and are adopting more advanced ways to measure satisfaction.

Friday, March 10, 2017
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For much of the 2000s, Universal Health Services, one of the nation's largest hospital-management companies, tried to get a handle on the issue of employee engagement the same way many, if not most, other major American corporations did: through an annual survey of its 75,000 or so workers.

But about nine years ago, the King of Prussia, Pa.-based healthcare firm began to question whether the big yearly questionnaire about employee satisfaction and morale was getting the results the company wanted. UHS executives say that, by the time the survey's findings filtered down to line managers at their hospitals and there were discussions about acting on the results, it was nearly time for the next questionnaire.

"It was just too much information," says Gerry Geckle, vice president for human resources at UHS. But even more importantly, she says, the information wasn't targeted precisely enough to drive the best solutions to the most immediate problems on the hospital floors. Today, the healthcare giant still conducts a company-wide survey, but only once every two years, while it relies on more focused and better-targeted efforts to gauge worker sentiment when particular problems arise.

For example, a couple of years ago, UHS began noticing higher-than-hoped-for turnover rates among registered nurses at its acute-care medical centers; pinpoint survey data from nursing staffers identified three problems, including a gap in communication that caused rank-and-file nurses to question some staffing practices. Geckle says that information helped UHS to work with managers to improve the lines of communication.

Jamie Welsh, who oversees the employee-engagement efforts as corporate director for human resources, says UHS supervisors "were not doing a very effective job of communicating why we're staffed the way we are, and they had a tendency to blame corporate, or staffing grids that were not well understood at the unit level." UHS used the results of that survey to make changes in a required leadership course to emphasize better staff communications, he says.

Human resource executives at UHS aren't the only ones to question what has become a well-established regime in the modern American corporation: the rise of major HR strategies around boosting employee engagement -- as measured by a sweeping annual survey and by tallying manager-employee interactions, all resulting in a yearly "engagement score" that some critics now insist is disconnected from actual business results.

Elusive Connection

Greta Roberts, CEO and co-founder of the Cambridge, Mass.-based consulting firm Talent Analytics, and a leading critic of the well-established employee-engagement practices, says that, while the traditional annual survey emerged as a way for organizations to measure whether employees were happy -- amid the assumption that satisfied workers will be more productive -- it's increasingly clear that the connection between an employee-engagement score and better business results is elusive. Morale surveys, Roberts says, are disconnected from "making sure that there are sales happening in sales, or that turnover isn't happening in customer services, or that truck drivers are not having accidents."

It's important to note that even the harshest critics believe there's significant value in having engaged workers who feel good about their jobs or who believe their employer is making a positive contribution to society. Problem is, the old way of assessing such happiness just doesn't cut it. Instead, most say, improved data collection and advanced analytics can and should be employed to make it easier for firms to collect information that's related to worker morale, but that's also better connected to business issues such as boosting a department's earnings or limiting turnover.

"The problem is that we're fixated on this magic score," says Scott Mondore, co-founder and managing partner of the Huntersville, N.C.-based consulting firm Strategic Management Decisions, which lists UHS as one of its clients. Mondore says he finds the handful of frequently cited studies that claim there's a strong correlation between the annual employee-engagement score and company earnings are superficial and unconvincing.

New England Patriots' football coach Bill Belichick, he says, is a hard-driving boss who comes off as "miserable," but "his team seems to win a lot -- he doesn't focus on engagement, but on performance and strategy and the bottom line of understanding what players need to do." It's not because of engagement, Mondore says, but because of winning Super Bowls that his players "seem like a happy bunch of guys."

The notion of employee engagement in the workplace didn't really exist before 1990, when Boston University business professor William Kahn published a widely circulated article arguing that the worker who can "bring oneself" -- that is, his or her personal passions -- to the office will be more productive. Over the next decade or so, the definition was altered to something closer to morale -- that engaged employees were on board with the mission and goals of the company. In 1999, polling company Gallup Inc. published the highly influential First, Break All the Rules, which included its employee-engagement survey, the Q12.

Data published by Gallup from the Q12 survey responses across all industry groups going back to 2000 show that engagement by its measure has been -- in Gallup's own term -- "stagnant," with the number of workers categorized as "fully engaged" fluctuating in a narrow band between 26 percent and 30 percent, Mondore points out. To him, this failure to move the needle suggests that the tens of millions of dollars that HR departments spend on consultants to drive those engagement scores has been largely wasted.

Given the sweeping acceptance of employee-engagement surveys during the 2000s, a backlash was almost inevitable.

John Guaspari, a long-time author and consultant who specializes in workplace-engagement issues, recently wrote a book titled Otherwise Engaged: How Leaders Can Get A Firmer Grip on Employee Engagement and Other Key Intangibles to press his point that business leaders have been too hung up on the quantity of their interactions with the rank-and-file workforce and need to focus more on the quality issues around engagement.

"Engagement is a state of being -- it's not a column on a spreadsheet," Guaspari says. Too often, he argues, managers perceive engagement as the number of contacts through emails from the firm's president, or attendance at a company-wide online town hall. He says better-quality engagement results from a focus on "intangibles" -- such as empowering employees so they'll feel free to speak their minds in their interactions with C-suite leaders.

Better Measures

Talk to other experts, however, and it becomes clear that -- while there's a growing consensus that a major rethinking of the meaning of "employee engagement" is long overdue -- there's disagreement about what comes next. Many top consultants feel that only relying on an annual engagement survey and score is too unfocused, but that the solution is not so much intangibles as it is more data, collected more frequently, and then put to better use with the help of modern high-tech analytics.

"A leader doesn't want to wait a year to see how he's doing," says Don MacPherson, a partner at Lincolnshire, Ill.-based Aon and head of global talent marketing, who recently co-developed a webinar titled Is the Annual Engagement Survey Dead? He says C-suite executives find that "when we're not getting data quick, when we do make changes, [we might] wait six months or nine months to see if it's on track." What's more, he adds, increased and faster feedback is increasingly popular with the workforce, particular as more millennials, raised on social media, come on board.

Adam Zuckerman, who leads the employee-engagement practice at Willis Towers Watson in Chicago, agrees the flaw with annual engagement surveys is that the results are both too general and too infrequent. In a 21st-century world of increased online interaction, Zuckerman argues, HR leaders are presented with an ideal opportunity to gather more data from the workforce, not less. "Most clients who simply rely on the annual survey are finding that, with the state of technology, it doesn't feel current," he says. "Most of our clients are looking to supplement that annual survey with another kind of listening strategy."

At Cleveland-based KeyBank, with 1,200 branches and 20,000 employees from Maine to Alaska, company officials came to the conclusion that the broad engagement survey that the firm had been sending out to all its workers on an annual basis had grown a bit "stale," says Katie Ladd, KeyBank's director of HR operations, employee relations and HR compliance.

According to Ladd, while the banking firm, which is America's 18th largest, feels strongly that a satisfied workforce drives better business results, it wanted to drill down deeper and target more specific issues -- perhaps by department or geographic location -- on a more frequent basis. A couple of years ago, KeyBank switched vendors and began working with Willis Towers Watson on a new employee-engagement regime.

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What KeyBank was anxious to learn, says Ladd, was "how do employees feel about training, how do they feel about their manager, about leadership, about work/life balance -- and through analysis [it sought to] identify what are the top drivers, what are the things that really matter to employees, and [what] are the signs and drivers of engagement." That information, she says, helps the firm develop action plans that can be implemented on the direct-manager level and can often be developed within a month, while, with the older more general surveys, the process often took several months.

"The technology is much more powerful now," Ladd says. "We are able to slice and dice the data in multiple ways, looking at a particular line of business. It has come a long way." For example, she says (with some irony), survey results suggested the HR department itself could do a better job of recognizing employee achievement. So, in response, an ad-hoc committee within the department, came up with a new rewards system. "The team worked together and put together recommendations and it was powerful," she says. "They owned it -- it wasn't a top-down thing from the HR leader."

Purpose a Key Driver

Still, embedded in the ongoing debate over the significance of employee engagement is the idea that, while surveys -- either annual or more frequent and targeted "pulse surveys" -- can pinpoint specific issues, a broader sense of a purpose-driven, high-morale workplace is baked into some companies that have made happy employees part of their corporate brand.

Perhaps no company in America is more closely identified with the term "employee engagement" than Southwest Airlines, the world's largest low-cost carrier. Since its inception in 1971, it has sought to place its workforce -- currently numbered at roughly 53,000 -- at the front and center of its branding as a fun place to fly and a fun place to work. Many magazine articles and surveys place the Dallas-based airline at or near the top of lists of high-morale workplaces, noting that its employees are so engaged with Southwest's mission and values that they even took a payroll deduction to help the carrier buy fuel when prices spiked during the 1991 Gulf War.

Airline officials say the secret to employee engagement runs deeper than annual surveys­ -- even though they do use them. In 2006 -- at the height of the buzz about employee engagement in the business world -- Southwest hired an outside vendor to conduct a company-wide engagement survey every two years. Julie Weber, Southwest's vice president for people, says that, despite the widespread belief that an engaged workforce is essentially part of the airline's bloodstream, company officials still wanted to make sure the company didn't lose its mojo.

"In any company that grows at the pace that we have grown and has a highly tenured workforce, you'll have employees who'll say, 'It isn't the way it used to be,' or, 'We're losing our culture' as the business process changes and we evolve and hire more people," Weber says. As a result of the survey findings, she says, Southwest made a tweak in the way it strives to recognize employee achievement, taking workers assigned to the airline's Cultural Ambassador Program and embedding them within various business units. But in response to broader business trends, Weber says, Southwest is now conducting more short-term pulse surveys of employment sentiment using the company's intranet, SWALife, although she notes that -- in keeping with the airline's image -- the questions are as just as likely to be fun, such as a peanut-preference question asking about "honey roasted or lightly salted," as to be probing of workplace conditions, such as one that recently surveyed workers on whether "I am proud to work for Southwest Airlines."

Weber believes an engaged workforce at Southwest begins well before employee sentiment is surveyed. Indeed, she says, it starts with recruitment -- the airline actively looks for enthusiastic personality types and only hires about 2 percent of its overall applicants -- and then gets a boost from employees who earn some of the highest salaries in the airline business.

But what matters most, according to Weber, is involving rank-and-file workers in important decisions -- such as the employee committee that recently overhauled uniforms for the flight crews -- as well as continuous recognition of those who advance Southwest's mission. "It's all having a deep belief that your employees come first," she says. "That's a tough business decision, but our leadership team has bought into that."

Southwest seems like a validation of Guaspari's theory that the best engagement practices can't be limited to a once-a-year number. For most workers, Guaspari argues, engagement comes down to empowerment. "A necessary condition for that is trust, and a necessary condition for trust is respect," he says. "And respect is one thing over which we have 100-percent control."


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