Research over the past 10 years has shown a clear link between employee ‘engagement’ and employee performance. Some notable examples include:
- in 2001, Gallup carried out thousands of interviews to demonstrate the link between employee engagement and performance. As a result, it developed the Q12 survey based on 12 key expectations, that when addressed appropriately, improve employee performance www.gallup.com).
- in 2003, Professor John Purcell and his team from Bath University created the Bath People and Performance model, developed by studying 12 high-performing organisations over three years. The model clearly shows the link between ‘people levers’ (a significant number of which are employee engagement-related) and discretionary effort (www.cipd.co.uk).
- in 2004, Professor James Oakley on behalf of the Forum for People Performance Management and Measurement conducted a study of 100 companies in the US to highlight the direct links between employee satisfaction, customer satisfaction and profitability (www.performanceforum.org).
But while employee engagement has been a much-used buzzword over the last few years, what does it really mean? If you look up ‘engagement’ in the Oxford English dictionary, you will find a definition relating either to the military (a battle) or to relationships (a formal agreement to get married). Seemingly unconnected, these definitions in fact have something in common – the need or both involvement and commitment. Likewise, employee engagement is about getting staff involved in your organisation and committed to its goals.
Wikipedia’s definition of employee engagement supports this view, describing it as “a concept that is generally viewed as managing discretionary effort – that is, when employees have choices, they will act in a way that furthers their organisation’s interests. An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work”.
In turbulent economic climates, when organisations experience plummeting profits and spiralling costs, engaging employees (and keeping them engaged) is more important than ever. Yet our experience has found that in recessionary periods, employers cut engagement activities often embodied as the ‘employee value proposition’) to the bare minimum. This is typically in conjunction with other cost-cutting measures such as voluntary or mandatory redundancy programmes and leaving vacant posts open.
This results in retained staff being over-worked, stress levels increasing and managers spending less time engaging with employees (other than conducting the minimum of performance ppraisals, objective-setting and reviewing under-performance).
Rather than driving engagement, then, organisations tend to focus on the ‘hard’ numbers: headcount, performance output measures and cost. And while these measures are important, focusing on them at the expense of human interaction can lead to a culture of mistrust, low morale and reduced performance – the opposite of what the organisation is attempting to achieve!
So how does engagement help organisations weather a recession? Employees, on the whole, come to work with the aim of doing a good job and achieving an objective. If staff feel they are involved and taken seriously, they will give their best despite temporary hardships and difficult conditions Maintaining strong employee engagement may therefore actively assist your organisation in getting through a recession, ensuring it achieves the best results possible.
Here are some ways to improve employee engagement when under pressure to cut costs:
1. Understand what makes your employees tick
If you are forced to cut costs associated with your employee value proposition, it is vital to first appreciate your employees’ motivations.
Reducing benefits or incentives that are less valued will obviously be simpler and cause less resentment and dissatisfaction.
On the other hand, cutting valued benefits is likely to result in employees feeling hard done by and consequently a reduction in effort and contribution.
It is important therefore to find out which benefits (or cost-incurring aspects of your culture) your staff value the most, and the least. If you don’t know the answer, there are a number of ways to determine it in a cost-effective way:
- Automated survey tools are a relatively low-cost option for gathering a large amount of staff views and data; and the output will provide insightful input for targeted engagement interventions.
Remember, however, these tools are a two-way street and can have a negative impact on engagement if no action is taken as a result of the feedback.
Surveys can deliver significant valuable data to HR; however the real skill is in developing the right questions to ask and analysing the data collected.
These are not traditional areas of HR expertise, but these skills are becoming more and more important to ensure you design and deliver the most effective engagement interventions. It pays to get HR staff trained in analytics.
- Ask managers to collect this information from their staff. This can be done using a focus group approach, brief questionnaires or straightforward one-to-one conversations.
2. Get employees involved
Being well-informed and part of the decision-making process ensures staff feel involved and committed to decisions. So rather than making impulsive reflex decisions and simply telling employees what has already been decided, try arranging focus groups or team meetings where senior managers can explain face-to-face what the situation is; the decisions that have to be taken; and why and how much resource needs to be saved (whether through cost cutting or margin increase).
These internal focus groups can be arranged quickly and at little expense. Groups should be set the challenge of developing their own creative methods to cut costs, to cope with potential extra workload and work smarter.
Experience shows that through face-to-face engagement, employees develop a sense of ownership and responsibility for the organisation’s survival through hard times.
Frequent follow-ups are key to this approach; this doesn’t mean sending an email update every now and again. Meet face-toface in the same room (or by videoconference for globally distributed organisations) and review progress, celebrate achievements and recognise team and individual efforts.
3. Make time for staff to take a breather
In difficult times, staff networking, training & development and career planning can often be forgotten. Learning interventions are cut back, while managers and employees have less time to focus on their long-term future and build professional relationships. Although these activities may not be considered requirements for short-term business survival, neglecting them will affect
employee engagement and have a significant negative impact in the long term.
If staff do not develop, they can stagnate and become disengaged and dissatisfied. This can result in them seeking new opportunities once the recession has ended, thereby slowing down the turnaround for the organisation.
Providing time for staff to network and develop does not have to cost very much. Networking events can be as small-scale as arranging team breakfasts, cross-departmental meetings or afternoon coffee workshops to exchange experiences and discuss improvement opportunities with peers.
4. Optimise technology to improve engagement
Many organisations have some sort of performance management software, and mature organisations are likely to have implemented software to support their full end-to-end talent and performance lifecycle.
However, often because of time pressures or lack of resources at time of implementation, these software tools are not exploited to their full potential. In times of recession, it may be worth reviewing your software and optimising its use to your full advantage.
Goal, objective cascade and balanced scorecard performance management systems are ideal ways of ensuring that employees are working towards the same overall goals; that progress is being monitored; and that managers are immediately alerted to successes and slippages.
Email alerts from these types of systems to managers can be used as a reminder to engage with teams and individuals faceto-face. For instance, you can use an alert of a recent success as a prompt to celebrate this success and recognise the employee’s or team’s efforts.
But while technology can provide invaluable assistance in supporting and flagging performance opportunities, we believe that face-to-face interaction is invaluable in these situations. It demonstrates to staff that they are important to the organisation and encourages them to continue to perform well.
5. Focus on team synergies
Many people have a strong desire to feel part of a successful team. As no single individual can be solely responsible for turning around organisational performance, it is crucial during tough times to reinforce team performance.
The inherent nature of teams to be self-regulating can be invaluable in helping you identify issues and resolve them as quickly as possible. In addition, celebrating group success is a quick and inexpensive way of recognising performance and building employee engagement.
Put processes in place to actively exchange insights between high and low-performing teams; for example, some organisations use ‘top 10’ and ‘bottom 10’ lists of team performance to encourage improvement and healthy competition.
In summary, employee engagement is key to releasing discretionary effort and improving company performance during a recession – and it doesn’t have to be costly or complex.
The key to successful engagement is understanding your employees’ motivation, involving them in decision making and encouraging face-to-face interaction, using software tools to optimise engagement activity and increasing the focus on team performance.
Bettina Pickering is a managing consultant and Amy Finn is a principal consultant at PA Consulting Group.