How important is employee engagement and how does it affect performance?
Studies show a strong correlation between high levels of employee engagement and company performance. But let’s take a less academic perspective. Regardless of their level, most people want to be personally successful, and are motivated to contribute to company success. So what gets in their way? If company processes don’t work, if people don’t feel appreciated, or if they feel the management is out of touch, they struggle to get work done and feel frustrated, eventually to the point of giving up. We all know these experiences and the impact they have on our contribution to company success. It is therefore no surprise that employee engagement is extremely critical to both individual and company performance – where else should performance come from than from people?
What are the challenges involved in driving employee engagement in the digital age?
Researchers say there has been a shift in the topics that show up as most critical in engagement surveys in large companies. For instance, the theme of enabling infrastructure – technology support, processes, access to information – is becoming an important driver of employee engagement.1 I suspect that these concerns are very much linked to the digital age. As employees are asked to work with more agility, more globally and constantly rely on technology, the bureaucracies and old technology infrastructures of large organisations often become frustrating to deal with and impede people’s daily tasks. In addition, people are now accustomed to easy apps and access to information in the private sphere. I think people’s expectations around simplification of processes and easy to use technology will place a new set of demands on organisations – many of which, by the way, have nothing to do with the HR department!
How are engagement, individual performance and innovation linked together?
Based on data analytics we are doing at Merck, we can answer this question very precisely for our own organisation. For instance, we identified a strong link between how performance is being managed and how engaged people are. In those parts of the organisation where performance and pay are being differentiated more strongly – and with the right discussions with employees – engagement was higher across all performance groups. This contradicts a long-standing myth in our organisation that you can best engage people by offering exactly the same incentives and rewards to all team members. We also saw that team leaders who themselves have higher engagement and score higher on innovation behaviours passed this impact on to their teams. So not only are engagement, individual performance and innovation linked, we saw how critical the role of the manager is in creating the environment for these factors to work positively together.
Is it possible to reach such conclusions only with survey data?
Not really. Such analysis first requires a careful attention to survey design. Although not in the standard catalogue of our survey provider, we added questions to our survey to measure topics related to digitalisation, curiosity and innovation. This requires organisations to think carefully about what their own critical change agendas require. Secondly, such insights only start to be generated when engagement data can be correlated on an individual employee level with other HR data sets, such as performance, potential or compensation data. This requires a high attention to both data privacy and communication, but ultimately results in a much richer and more targeted set of conclusions and interventions.
How do data analytics identify target group-specific interventions?
Once an organisation can show correlations of engagement data with other HR or company data, the differences across sectors or functions can be calculated rather than theorised based on external studies. At Merck, we were clearly able to see topics that are consistent across the group versus topics that were very specific to certain functions or sectors. For instance, it became clear that in certain sectors, better training of managers is required regarding how they manage performance.
What would you like to achieve by attending the Employee engagement conference?
All of us in expert roles in organisations have the obligation to be more advanced in our thinking than is currently required in our organisation to be able to prepare the ground for the next evolution. Different organisations develop their engagement approach in different ways, responding to dynamics that are most important in their situation at any given time. Certain topics have been critical for Merck recently, but there are certainly aspects other companies are working on that are just over the horizon for us. A constant exchange can help us all be prepared to support our organisations with the next relevant evolution.
1. The Engagement Outliers: How to Accelerate Extraordinary Improvement in Employee Engage-ment. Aon Hewitt, June 2017.