North American firms are spending almost one billion dollars per year on employee engagement surveys, schemes, and consultants. This major investment is not significantly increasing engagement according to Gallup, but merely tracking the failure of management to get employees engaged.
Is the investment into engagement necessary?
One reason investment into employee engagement is important is that attrition is expensive. Harvard reports, firms that have strong engagement scores experience up to 65 percent less attrition. A Center for American Progress study put the cost of replacing an employee between 16 to 212 percent of their salary.
Managers not only want to keep good people; we want them to go above and beyond. Engagement is just the tipping point. The most engaged employees can still hold back their discretionary effort. Meaning, they are not going above and beyond their basic job functions. I submit that if you want to get the most out of people, you need to understand them. To understand them, you need to know what they value.
Our personal values direct our behaviour, inform opinions, influence communications, forge individual perception, guide principals, define our moral code, and fog the lens of personal experience. If you, as a manager, can gain insight into your team’s personal values, you will be able to align work, communicate, influence, and truly understand your team.
Defining the values of your employees will help you to understand why each person reacts differently to the same event. Here is an example:
To increase engagement, a local company recently announced a new bonus structure, which may seem like a great idea, and yes, some employees were very happy, but other employees were just as equally angry, scared, uncertain, still other employees were totally indifferent to the bonus structure. Don’t we all work for money? Isn’t money the only important thing? Conflicting personal values perceived the intentions behind the bonus structure differently.
An HBR study from 2013 stated that there was a less than 2 percent correlation between pay and job satisfaction. This study reviewed 120 years of research with a data set of 15,000 individuals and 115 coefficients. LESS THAN 2 percent!!!!
Still think a bonus structure, profit sharing, or yearly a raise is important? (it is)
Do you think paying someone more will make them more engaged or willing to go above and beyond in their work? (it won’t)
According to Gallup, only 34 percent of U.S. workers feel they are engaged in their jobs. Given that the same poll shows that companies with higher engagement scores were 21 percent more profitable (and had 65 percent less attrition) – engagement is a revenue generation and cost saving imperative. Tell me your company does not want to be 20 percent more profitable…
*Note to decision makers – good managers are the key success factor in your drive to increase engagement. Gallup stated that, “management accounts for 70 percent of the variance in engagement scores.” Meaning, bad managers cause disengagement.
Is understanding the personal values of your team the key to better management?
HBR authors, Guth and Tagiuri, advocate for the inclusion and understanding of personal values in all aspects of management including in the development of corporate strategy, stating:
“In dealing with conflicts between personal values and the maximization of economic opportunity, managers should keep in mind that corporate strategy must ultimately inspire personal commitment or else it will not be implemented.”
Values can be compared to source code in computer programming. Values are human source code. Values build the foundation of who we are. One-reason North American companies are not finding success in the drive to increase engagement is that engagement is just a measurement, and corporations are using a one-size-fits-all approach.
Leaders are trying to move the engagement dial by managing their employees in the same way, incentivizing and rewarding them in the same way, and communicating with them in the same way. However, personal values will influence the unique reactions employees will have to standardised management tactics like bonuses. If you start with understanding values you will understand your employees and be able to deeply connect with them.
Want to increase your engagement scores to earn more profit and keep good people? Watch this space for more.