Posts Tagged "Employee Engagement’

Compensation Cafe: Employee Engagement and Incentives Compensation

by Derek Irvine

Compensation CafeRecognize This! – Employees choose to give more and behave in desired ways based on the environment they are being asked to engage in.

Employee Engagement Is Dead! Long Live Employee Engagement!

What sounds like a non-sequitur may not be. Last week on Compensation Cafe I blogged: “Is Employee Engagement Moot in Today’s High Stress Work Environments?” in which I reflected on the seeming stagnation of employee engagement stats in the research across many organizations. I argue:

No, the error lies in how we are pursuing employee engagement. Yes, employee engagement is a two-way street. Employees must themselves choose to engage in the work, but employers must also offer conditions in which employees would want to engage. That’s where we’ve fallen down.

What must change? It’s time to go back to basics. Why should employees choose to engage in the organization’s greater mission, purpose, and goals and give additional discretionary effort to achieve them if (1) compensation is not equal to market rates or is insufficient to cover basic living needs, (2) the work environment is itself unsupportive or downright abusive, and (3) essential human needs of rest, restoration and the ability to meet the needs of the whole person are ignored.

Read the post for more on the backing research and how to change those three factors to improve employee engagement.

Then today, I blogged “The Tricky Business of Incentive Compensation,” examining research on when and how incentives can motivate, given the typically low performance of such schemes. As I unpack in the post:

What they found was that incentives largely worked… but only for certain people and in certain circumstances… If companies are primarily concerned with behavior that aligns to performance, shifting focus away from pre-designated incentives structures towards “surprise” programs that can recognize and otherwise reinforce those behaviors may be a valuable path forward. For example, if managers are recognized and publicly celebrated for a willingness to take risks like those mentioned above, the signal may be that much stronger for others to overcome that initial sense of inertia.

Again, click over for the full post.

Why You Need to Revisit Maslow

by Derek Irvine

Balls in balance on fulcrumRecognize This! — The hierarchy of needs can have a lot of value, but only if we really understand how needs are fulfilled in the workplace.

Maslow’s hierarchy of needs has staying power. It may often be reduced to an oversimplified pyramid, as I’ve written about before, and has its share of critics, but there is a silver lining!

The longer a theory hangs around, the better the chances that folks can return to the original thinking, debunk common myths, and pick out the true value of the thing. So let’s re-evaluate how a needs hierarchy ties into notions of engagement and recognition in business settings.

Where do we stand right now?

There are three primary levers that organizations can use to fulfill employees’ needs, aligned to the traditional hierarchy. Two of those- base salary and benefits– mostly target basic needs like food, shelter, and safety. Once a certain threshold has been reached, though, the incremental value of continuing to fulfill these needs tends to have diminishing returns – especially as focus shifts to higher order needs.

The third lever- recognition– represents a much smaller slice of the overall compensation picture (typically around 1-2%), and yet has the larger potential impact in reaching across the higher values of belonging, esteem, and self-actualization. These dynamics are illustrated in the smaller of the two pyramids.

Reimagination of Maslow

What does recent research say about Maslow?

To understand the scope of the impact of recognition, we need to take a deeper look into how needs are actually fulfilled.

Recent research based on global data from Gallup finds support for a “tendency, but not a strong one” for needs to be achieved approximately in the order that Maslow theorized. It is important to be clear that this does not mean a person satisfies a need at one level before moving onto the next one in this linear and lockstep process. Nor does it mean that every person achieves each need in exactly the same order and timeframes as everyone else.

Instead, we can think of need profiles, where individuals can “simultaneously work on a number of needs regardless of the fulfillment of other needs.”

Moreover, individuals need profiles vary, ranging from a focus on a few needs to the full spectrum. The former most likely address only physiological and safety needs (influenced much more by the country one lives in than specific individual circumstances). Further along the spectrum, individuals expand their focus to a combination of basic and psychosocial needs (like belonging, esteem, and self-actualization), some trending towards Maslow’s order and others not.

What do need profiles mean for employee engagement?

A workforce is a collection of need profiles across the hierarchy. Each employee differs in terms of complexity (how many needs are simultaneously being focused on) and salience (how needs are personally ranked in terms of importance and impact). Furthermore, most employee need profiles will be focused on psychosocial aspects over which employees feel they have the most control. It just so happens these are also the aspects that are closely tied to engagement.

Practically, this suggests the pathway to engagement occurs through broad values-based initiatives focused on fulfilling a variety of different needs, appreciating their fluidity rather than a narrow focus on maxing out any particular level of the hierarchy. These dynamics are captured in the larger of the two pyramids.

Recognition works across need profiles!

The challenge is meeting people where they are in terms of their need profiles. Relationships will matter more to some employees, task mastery or esteem will matter more to others, while still others will prefer some balance between the three. Social recognition is powerful because it can raise the total level of fulfillment across this diverse set of need profiles, eventually resulting in greater employee engagement that is also aligned to core organizational values.

For example, recognition can focus on a full range of behaviors that contribute to achieving a value of quality. For those with strong needs for belonging, recognition can emphasize the key role that developing relationships had in helping a project team achieve its quality goals. For those with strong needs for esteem, recognition can focus on the specific achievements and contributions of the team. And for those with self-actualization needs, recognition can reinforce continually striving to enhance the processes of quality.

Think of how your own needs are met at work. What does your own profile look like and how do you meet those needs while delivering on company values?

Why Is that Last Mile Such a Challenge?

Photo of long empty roadby Derek Irvine

Recognize This! — Aligning individual behavior to core values can be a challenge, but recognition is one way to win over that last mile.

Those who know transportation logistics or supply chain management are very familiar with the “last mile problem.” Fans of online retailers may also have some personal experience with this challenge: a package is sitting in a distribution center in the next town over instead of on your doorstep. The last mile refers to that short amount of distance between a major hub and a product’s final destination, often a disproportionately costly portion of the entire shipment.

There is an analog to this problem in the business world when it comes to executing strategy.

Many organizations can readily develop a strategy for their business, one that ties their mission and ambitions to the larger competitive context. Executives spend a lot of time getting the strategy right, and then communicating it to their divisional leadership. These leaders are subsequently tasked with making the strategy actionable, creating initiatives and business plans to deliver on key goals. The “last mile” involves the challenge of aligning individual employee behavior to the strategy and initiatives, as the final part of the cascading process.

As in transportation, figuring out how to win in the last mile is often a challenge.

What is one key to success in cultivating the right employee behaviors? It turns out that a company’s values are critically important. In fact, ModernSurvey found that close to 60% of employees say that their organization’s values actually guide their behavior at work. As Patrick Lencioni has written, “values can set a company apart from the competition by clarifying its identity and serving as a rallying point for employees.” They are a cohesive force that aligns the “last mile” micro dynamics (rallying of individual employee behavior) with macro dynamics (organizational identity and strategy).

Unfortunately, this doesn’t mean values are necessarily easy to get right.

As Lencioni continues, “coming up with strong values- and sticking to them- requires real guts.” So what makes a set of company values strong? I’ve addressed this topic previously, but two components from that post bear repeating. Strong values have:

  • Internal strength, ensuring that values are truly core values that remain central over time. Differentiated from either aspirational or accidental values that can draw leaders’ attention astray, core values lend meaningfulness and context to the set of behaviors that are expected to achieve organizational outcomes.
  • External strength, or the extent to which employees understand and are able to act upon those values as a rallying point. This means more than having a set of values on a plaque on the wall. Values are given external strength when employees behave in a values-consistent way every day, and are recognized for that behavior.

If core values are clear and employees are empowered to act upon them, the last mile will be won.

Social recognition offers a powerful tool for reinforcing alignment to core values, much like other technologies have been leveraged to solve the last mile challenge in transportation. It can bring values down off the wall and into the hearts and minds of employees, establishing sets of behaviors that are immediately recognized and shared across people. It is the mechanism that reinforces continuous cycles of values-aligned behaviors, ultimately resulting in greater engagement and returns.

What has your experience been over the last mile of aligning employee behavior?

Compensation Cafe: Keeping SCORE to Keep Employees

by Derek Irvine

Compensation Cafe logoRecognize This! — No single approach to meeting employee needs serves all employees all the time.

Typically, I’m not the type of person to keep score. Then an article in Huffington Post about a SCORE acronym for what matters most to employees caught my eye.

Click over to Compensation Cafe for the full post and why I disagree with the author’s assertion that Stability and Compensation are less important to high-performing employees than Opportunity, Responsibility and Environment. As I say in the post:

I can see the argument that stability and compensation are particularly important to those new to the workforce, but the need for employees to believe they are fairly compensated for the work they do does not diminish throughout a career. Since in this author’s structure, recognition and incentives are included in compensation, this is particularly true. As an executive friend of mine once told me, “I’ve never been promoted to a level where I didn’t want to hear ‘thank you’ for my efforts to help others.”

Read the post for the rest, and tell me your take in comments.

3 Challenges for Creating Authentic Engagement

by Derek Irvine

Woman in maskRecognize This! — Employees who engage their authentic selves at work contribute to unparalleled employee and customer experiences.

I was reading a recent Forbes article that discussed the distinction between employees’ authentic engagement versus scripted service in creating an unparalleled customer experience. One quote from that article really jumped out at me. “Of course, this [creating authentic engagement] is more challenging than doing things by rote: challenging for the employee and challenging for the manager.”

This immediately reminded me of a poignant example that we discuss in our book, The Power of Thanks. In one interaction at a Fairmont Hotels & Resorts Rocky Mountain property, a room attendant overheard the children of a guest ask about roasting marshmallows in the room’s fireplace. When the family returned to the room later in the day, they found a basket of s’more ingredients and a handwritten note from the employee saying, “Because we know how much you like marshmallows.” A quote from Fairmont’s executive leadership captures the challenge of developing that kind of behavior across the company: “You can’t engineer that kind of creativity.” Why is it so hard? Here are three reasons:

Challenge 1 (for Employees): Moving Beyond Scripted Service

It isn’t difficult to see how “doing things by rote” would be the easier path from the employee perspective – service that involves making sure that the room is clean and towels are stocked. But even if performed to the highest levels, these services wouldn’t have nearly the sticking power for this family or for the organization. Creating authentic engagement on the other hand, is much more impactful but also more difficult to achieve and sustain. For the employee, work becomes much more than the job being performed. It involves not only being open to opportunities like the one above and being prepared to engage the customer, but also in having the support of the organization to behave in those creative and authentic ways. In the case of the Fairmont room attendant, it was being attentive to the guests’ experience during their stay and being prepared to deliver a little extra to make the experience even better.

Challenge 2 (for Managers): Supporting Individual Creativity and Authenticity

As the executive notes above, management’s challenge lies in nurturing that kind of individual creativity and authenticity across the entire organization. There isn’t a policy or manual that will work for that or even other similar situations. The solution instead lies in developing a solution to recognize these types of moments, integrating them into the company culture and values over time. Managers also need to be sure they attract, select, and retain employees who want to make those types of moments happen. Still, the challenge may be somewhat easier in the hospitality and other customer-facing industries, where an employees-first mindset drives superior customer experiences through authentic engagement.

Challenge 3 (for Everyone): Enhancing the Impact of Work through Meaningful Interaction

So does this distinction matter for groups or companies that are not primarily customer-facing? As Adam Grant (of Give and Take fame) said in this Knowledge@Wharton article: “Everyone has an end user.” That brings us to a third, broader challenge to authentic engagement, which is identifying who that end user is and opening lines of communication and interaction between the two. Research summarized by the Wharton article mentioned above suggests that employees who know how their work is meaningful to the beneficiary of that work are both happier and more productive than employees who lack that line of sight.

Recognition really helps create these lines of sight on several fronts. Let address each challenge in turn, building from the bottom up. First, recognition allows beneficiaries to reach out directly to the people whose contributions were helpful to them, resulting in increased happiness and productivity. Second, the behaviors and ultimately data generated by employees recognizing each other gives managers a powerful tool to help sustain the types of creative behaviors that stem from authentic engagement. Finally, employees are able to see and learn from vivid examples of others’ engagement, expanding their own repertoires of creative behaviors, so that they are ready and supported when opportunity knocks.

Do you remember a time when you were on the giving or receiving end of an authentically engaged moment at work? How did you go about recognizing that moment?

Oracle Employees Say Recognition from Peers Most Powerful Means for Employee Engagement

by Derek Irvine

Say ThanksRecognize This! – Employees are telling us what would engage them more in their work. We simply need to listen.

Want to know how to engage employees? Perhaps the best (and obvious) answer is to ask the employees. Oracle did just that. Results of their survey were recently published in Personnel Today. Here are the key excerpts.

Who has greater influence on employee engagement:

  • 42% say peers
  • 21% say line managers
  • 7% say unit managers
  • 3% say HR

What would most drive employee engagement:

  • 53% say recognition for their achievements
  • 35% say greater understanding about their contribution to the company

Peers impact the engagement of others far more than even their own managers can. And knowing “what I do is noticed and matters to others” encourages me to increase productivity and serve customers better.

The good news is a strategically designed social recognition program accomplishes all of these goals. Peers are encouraged to notice and appreciate the great work of their colleagues, giving managers and HR many more “eyes” to catch someone doing something good and praise them for it. Recognition is designed to be detailed and specific, conveying to the recipient how he or she demonstrated a core value or desired behavior and how that effort hlped the giver, the company, or the customer.

Loïc Le Guisquet, president for Europe, Middle East and Africa (EMEA) and Asia Pacific regions, concurs:

“Employees feel engaged by their peers and HR can help encourage this by providing access to sharing and collaboration platforms and social tools. But employee expectations are also changing fast, particularly those of millennials.

“They want recognition and feedback and they want it consistently. HR can deliver this through technologies that provide managers with a more up-to-the minute view of their employees, which in turn encourages a more personalised, rewarding dynamic between them.”

The most effective way HR can support employee engagement is by helping employees recognize and appreciate each other’s efforts. Why would we hesitate in facilitating that kind of desirable behavior? Indeed, in her Data Point Tuesday post today, China Gorman pointed to a report from Interact Authentically that ended with this comment:

“We cannot forget our most basic core goal in business: to create connections and relationships. Today’s frontier is not the technology required to run a global company – it is applying technology while bringing along the nurturing, engaging aspect of human communication.”

What’s holding your organization back from facilitating easy yet meaningful recognition and appreciation, thereby building relationships and human connections in your workplace?

IBM Smarter Workforce Institute: Achieve the Power of Thanks through Multiple Recognition Channels

By Derek Irvine

Separate arrows merging into oneRecognize This! – We all know the power of social recognition to engage and retain employees, but when employees have multiple channels to share recognition, the benefits grow exponentially.

The IBM Smarter Workforce Institute (SWI) recently released a report showing the importance of using multiple channels for recognition. The report is based on a survey of 19,000 workers from over 26 countries and shows the Power of Thanks. The more communication channels we use to recognize workers, the better we can reach and thank employees. This thanks leads to higher engagement and retention.

Key findings of the report include (quoting):

  • Employees who receive recognition are more likely to be engaged at work. The engagement level of employees who receive recognition is almost three times higher (76%) than the engagement level of those who do not (28%).
  • Workers who receive recognition are less likely to quit. Without recognition, about half (51 percent) of surveyed employees say they intend to leave, with recognition just one quarter (25 percent) say they intend to leave their organizations.
  • Employees whose organizations use multiple communication channels for recognition are more likely to feel appreciated and show a higher level of employee engagement. The more channels used for recognition, the higher the employee engagement level.
  • The findings imply that technologies such as social and mobile could be strong candidates for the effective delivery of recognition as they offer interactive, frequent and immediate communication via multiple channels.

Why Multiple Channels? More Timely Recognition!

Written and face-to-face recognition were historically the primary methods to thank workers. These channels are not enough to reach employees in today’s global, virtual and mobile workplace. Use of technologies like mobile recognition, online recognition platforms, peer-to-peer recognition videos are critical to keeping high employee engagement levels.

Timely recognition is essential for recognition effectiveness. Mobile apps and other technologies make this far more feasible more than having to wait to get into the office and submit paperwork or logging in through a computer. With a smartphone, recognition can happen anytime, anywhere. This is especially true for overcoming geographic boundaries. IBM SWI points out:

“It has been shown that recognition is more meaningful when it is delivered in a timelier and more frequent manner. By removing the restriction of geographic location and timing, the use of a variety of technology-enabled communication channels can have a positive impact on employees, driven by the fast and frequent delivery of recognition.”

Email Alone Is Not the Answer

Though we know speed and timeliness of recognition matters, email unfortunately continues to dominate (at 58%) as the most common form of technology used for recognition. But email is highly flawed when used as the sole means of “technology-based recognition.”

It does not share the accomplishment of the employee with peers or provide a way to easily track and report on recognition activity in any kind of deep or meaningful way. Truly effective methods are driven by social recognition, involving work communities, online platforms, and mobile apps that share recognized accomplishments with colleagues and work friends to enable a flurry of congratulations on a job well done.

Increase Engagement and Retention

Recognition is a direct, key driver of employee engagement. IBM SWI’s research showed employees who receive recognition are 48% more engaged than those who do not. IBM SWI showed that the more channels used for recognition, the higher the employee engagement.

IBM SWI_Multi-Channel Recognition

Social recognition is key not only to employee engagement, but also to retention. Retention is in the top three challenges facing human resources today. When looking at the link between recognition and retention, 51% of workers who did not receive recognition intended to quit versus only 25% of those who received recognition.

The Time to Evolve Recognition Is Now

If we’re looking to retain, engage, and get the most out of our talent, we have to evolve our recognition strategies to communicate in a manner that is relevant to today’s workplace. IBM SWI concludes their research with this recommendation:

“Based on findings in this study, organizations should consider taking full advantage of varied communication channels in their recognition programs. In particular, social, mobile, and other technologies could be strong candidates for the effective delivery of recognition messages as they enable multiple channels and offer opportunities for interactive, frequent, and immediate communication. If done right, employee recognition programs can unleash the full power of thanks.”

I couldn’t agree more. What recognition channels are you using to recognize your workers? Are you using enough channels? Are you using the right channels?


Gallup: Why Only 15% of Germany’s Workers Are Engaged

by Derek Irvine

Robot shaking hands with a humanRecognize This! – 85% of Germany’s workers are not engaged or actively disengaged, costing the EU’s largest economy €275 billion each year.

I often write about Maslow’s hierarchy of needs and how being recognized is critical to our sense of fulfillment, hence, our productivity at work. In cultures across the globe, this need for recognition unites us as humans. We may not recognize others in the same way, but the need for thanks is there nonetheless.

This month, Gallup released findings that 85% of German employees are disengaged at work—and it’s costing the country €275 billion a year in lost productivity. That’s almost double the amount two years ago. Why is this happening? What makes German employees and their workplaces so different?

Engagement is primarily driven by managers. The Bundesministerium für Arbeit und Soziales, Germany’s federal ministry of labor and social affairs, acknowledges that people management and management culture is not one of the country’s strengths.

MBA programs in Germany focus on training for financial and process management, with little or no attention to people management. That value is reinforced in the workplace.

Employees are promoted based on technical skill performance rather than people management talent.  Gallup asked German managers why they believed they were hired for their current role. 51% cited their expertise and tenure in the company or field. 47% believed their managerial status was due to their success in a previous non-managerial role. Just because an employee has strong technical skills does not mean they have the ability, training, or supportive environment to become effective managers that can contribute to employee willingness to engage.

Germany’s federal ministry of labor and social affairs recognizes the need for a cultural shift in the workplace. What could some of these solutions look like?

  1. Provide training and mentoring for managers: Create mentoring opportunities for managers with their leaders on factors proven to help increase employee engagement – recognition, trust, pride, and camaraderie. Measure, set targets, and hold managers accountable for their engagement.
  2. Make employees feel safe in expressing opinions and ideas: Foster trust by welcoming, listening, acting on employee feedback. Reward people for voicing innovative ideas. Encourage discussion between employees and regular one-on-one meetings between managers and their reports.
  3. Select managers based on leadership skills rather than subject-matter expertise: Identify and promote employees for leadership based on talent for engagement. Reassign managers who fail to understand the importance of facilitating engagement.
  4. Break down silos and hierarchical structures common in the German workplace: Recognize and reward cross-departmental collaboration. Set up communication channels that foster partnerships.

Regardless of the country we live in, our cultures have areas of strengths and weaknesses. What are the strengths and weaknesses of the common work cultures in your country? What kind of culture do you have in your workplace?

Disengaged Employees and the Risk of Inside Hackers

by Derek Irvine

Peeking through blindsRecognize This! – Successfully engaging your employees instills a loyalty that can prevent company insiders from leaking private information.

It seems we hear about more breaches of companies’ customers’ personal or financial information nearly every month. When companies suffer security breaches, costs are significant, but financial losses can be recouped. It’s much harder to recover from the loss of consumer trust and loyalty. As Will Rogers says, “It takes a lifetime to build a good reputation, but you can lose it in a minute.” A customer’s identity theft following a trip to their favorite big box store, for example, may make them reconsider where they shop.

Some of these cybersecurity breaches come from outsider hackers, but it is not uncommon to hear about breaches of security coming from company contractors, employees, or outsiders with employee assistance. In fact the Online Trust Alliance found that, in the first half of last year, “nearly a third of all data breaches…came from an internal actor and 90 per cent were preventable.”

Hacks as large as at Sony and this weekend’s at Ashley Madison are suspected as inside jobs. The breaches caused by Edward Snowden and leaks of US government security documents are still world news. Whether you agree with the above employers’ missions or not, it’s apparent that employee loyalty is more important than ever.

What are some of the things companies can do to protect their customers’ data?

  • Spend millions in cybersecurity software
  • Hire outside consultants or beef up internal IT departments
  • Increase employee engagement

If you didn’t check that last bullet, you’re missing out on a low-cost, high-impact opportunity. Even Bloomberg admits, “Companies’ worst hacking threat may be their own workers.”

Disgruntled employees or employees that do not buy into the company mission are not just flight risks, they’re cybersecurity risks. They can either perform the hacking themselves or collaborate with outsiders to access your company’s information. That’s how important employee loyalty, buy-in, and engagement is to companies.

Lucy L.M. Phillips, Managing Director and Employee Engagement and Change Communications Practice Lead, at FTI Consulting suggests using these tactics to make data security part of company culture (quoting below):

  • Clarify the business risk.
  • Align with values and culture.
  • Involve employees directly in solutions.
  • Partner with the compliance and IT teams.

Phillips explains, “Creating a culture where employees respect data and are motivated to protect the business is critical to cyber security.”

So, if time you are looking to enhance cybersecurity in your company, take a second look at your employee engagement and satisfaction levels. You may have invested in better security software, but have your employee engagement practices gotten with the program?

Additional reading:

Trends in Employee Recognition: Culture-Oriented/Results-Driven

by Derek Irvine

Compensation Cafe blog logoRecognize This! — Results-driven recognition programs that focus on deeply embedding recognition into the company culture have the greatest impact on employee engagement, motivation, satisfaction and retention.

WorldatWork released their latest“Trends in Employee Recognition” report this week. I shared key trends and insights on the report on Compensation Cafe today (click over for more).

To summarize, top trends highlighted are:

1) Prevalence of recognition programs in organizations continues to grow with emphasis on those that drive results. While length of service continues to be the most prevalent of program types, those that have real results-driven impact continue to grow in popularity, especially programs celebrating above-and-beyond performance, motivating specific behaviors, and encouraging peer recognition.

2) Top goals for recognition continue to align with types of programs offered. Motivating high performance, reinforcing desired behaviors, and creating  positive work environments through a culture of recognition continue to top the goals list for recognition programs.

3) Results-driven programs gain in importance in organizations overall, with an emphasis on increasing employee engagement, motivation, satisfaction and retention.

4) Creating at true culture of recognition and appreciation is a driving factor for increases in employee engagement and motivation.

“Through further analysis it was found that organizations with a strategic and/or embedded culture of recognition indicate that their employees have higher engagement, motivation and satisfaction. Additionally, organizations leveraging result-driven recognition programs, in particular, may be experiencing greater overall success.”

As I said in Compensation Cafe, Good planning matters. Employee recognition is not a nice-to-have soft-skill. When done strategically to reinforce desired behaviors and drive organizational strategic objectives, recognition can have a significant impact on the factors most closely related to increased employee performance, productivity and customer service. That requires detailed planning up front and continual evaluation as organizational needs change for two critical factors: (1) your primary goals and ambitions for the program and (2) the metrics you will use to measure success against those factors.

What trends for recognition are you seeing in your organization?