That elusive employee engagement

As a former consultant in the compensation, benefits and HR arena, I am often asked about improving that elusive employee engagement, as if there is a formula. I was having a similar conversation this morning with a good friend and compensation person in a major organization. When I started to chuckle, he asked why?

The problem is employers have been after this difficult goal for years, but it has become even more elusive in the last ten years. Why? Because employers killed employee engagement. You cannot treat employees poorly and not shoot straight with them during difficult times, and then say every thing is alright now and we want you to be engaged.

During the most recent economic downturn and even before, employers, cut pay, froze pay, downsized, right sized, off shored, and outsourced all in the name of controlling expenses. It was not unusual for people to be let go and then walked to their desk to collect their things and escorted out the door.

Employers would say we have to hold the salary budget tight as things are tough, going to be tough or it is too soon to adjust pay. Or, one of my least favorite tactics is to let people go before salary increase time and not adjust the median increase forward. In other words, they would cut the bottom performers and force fit the performance metrics down making a “meets expectation” performer a “partially meets” as the distribution of performance is now out of whack.

Yet, it need not be this way. There was a company in Germany where leaders sat down with all employees during the recession. They said times are tough, but we all are going to give a little, so the CEO, EVPs, and all employees, took pay cuts that would be restored in full when times got better. The logic is the company did not want to let anyone go. Everyone pitched in. This is a strong message. You should not be surprised, these employees remain engaged throughout.

Employee engagement is not created by a panacea. Using the Nordstrom model, it would look like inverting the pyramid where customers are at the top and people who serve them are next, with shareholders at the bottom. The thesis is if we treat our customers and those who serve our customers well, the shareholders will make more money.Yet, this is a mission where everything flows from the customer. It also allowed a communication avenue for the best ideas to flow from those closest to the customer.

I have written before about Paul O’Neill who turned around Alcoa in the 1980s. He focused on employee safety first and foremost. Why? It was the only thing he could get management and the union leadership to agree on. As a result, communication improved up, down and across the organization as safety improved. But, with new found empowerment, process and customer service improvement ideas started flowing from those closest to the action.

Engage employees, glean their input, value their opinion and pay them fairly. If companies do that, the employees will also feel they have a stake in the game. If you set this framework in motion, decisions can be made in support of this mission, whether they be compensation, benefits, flex schedules, stock ownership, etc.

One final thought is the commitment has to be more than mere words. O’Neill got management attention when a few weeks into his tenure, an employee was killed in an accident. He gathered his leaders together and said “We killed this man. I want to know in 24 hours, how he died, why he died and what we can do to not letting it happen again.” I don’t know about you, but that is what leadership looks like. I would  be willing to work hard for this leader.


20 thoughts on “That elusive employee engagement

  1. Cannot disagree with anything you said. It seems to me that one inherent problem is the “Peter Principle” which states that “We get promoted to our point of incompetence, and that is where we remain.” No wonder there so many management based issues!
    The other thing that I have experienced is a culture shift in that in the 1970’s, a company’s Personnel Department represented the employee against Management as necessary. In the 1990’s, Personnel became Human Resources, and represented Management against the employee as necessary!
    Finally (I really could go on much longer!), when an employee tries to negotiate a salary increase unsuccessfully; is given the choice of the status quo or leave, and chooses to leave…. and then sees the position posted at a higher salary range, it does nothing for the integrity of the company. Why do I keep reading reports on how staff are no longer loyal, or always on the move etc.. In one word….. duh! You reap what you sow!

    • All good points. The salary budget process usually punishes the steady Eddie average employees. They get behind and never catch up. The ones who have one or two superior years, will do better even if they have a few bad ones, than the steady Eddie’s.

      I advise folks who are considering leaving to do much self reflection. Is my value more intrinsic to current organization or extrinsic and transferable? I say this because if someone is prepared to leave they should know if they will be more successful elsewhere.

  2. I would enjoy working with him as well. The employment history and outlook in the last 20 years is, to say the least, bitter. And companies have done nothing to make it better, instead making it much worse with all the actions you speak of. Of course, open world markets mean that people in power don’t really care. You can’t afford to buy my products because I laid you off and you still haven’t found another job because your skills were outsources? Meh. I’ll just sell overseas!

    • Leiah, all good points. The disappearing middle class has been occurring over the last 35 years. And, it will continue with technology.

      But, a key point missed by management, is if you treat employees like crap when you fire them, people will remember that and tell others. They will factor that in their buying decisions.

      Thanks for your comments. Keith

  3. Note to Readers: As an example of employee engagement, over the years our local office of a global firm scored highly on employee surveys in terms of engagement. We also had some of the highest growth rates in revenue.

    We had an active Community Relations team, we had an active Social Committee, we gave and encouraged opportunity for younger staff with clients, and we listened to our staff at all levels. As a result, we retained key folks longer at all levels, including vital administrative assistants who had great client service skills. And, we attempted to pay fairly and reward with incentives.

    Not ironically, but expected, our engagement suffered when our company flipped the matrix and took more control of these things away. We became an office of business silos, where it became harder to do office-wide things.

  4. Excellent Keith! I would take your closing comments about Paul O’Neill a step further and say that this is what adult leadership looks like. We suffer from a plethora of adults in positions of authority who behave like entitled children.

    • Very true, Rob. I have consulted and worked with some of the greediest CEOs, who primarily thought “what’s in it for me?” I have also worked for some superb CEOs, from demonstrative leaders to very egalitarian ones. It makes a huge difference on results and employee morale.

      • One day I’ll have to write about the SBC takeover of Pacific Bell.

        The difference between the two corporate cultures right down to the way they valued the customer was shocking.

        Needless to say, I left.

      • That would be an interesting read. The M&A part of the firm I worked cited that most mergers fail to be accretive, in other words, add to the combined separate values. The key reason is often overlooked, cultural differences and lack of communication of the new vision for the company – the benefits of the merger.

      • Yes, I know…Let me tell you what was behind it.

        I was a technology trainer for Pacific Bell Internet. I started as a call center employee.

        I think the merger began in 1998. By July 16th 1999 SBC employees had arrived at Pac Bell’s San Francisco office for a week’s training session.

        This was the day that John Kennedy Jr. died and during a break I mentioned to my assistant that I felt sad over his death, and I wondered if other people my age shared a sense of deja vu, meaning people who remembered the day his Father was killed.

        Mind you this was a comment made to a colleague during a break.

        Quite out of no where a guy from Texas loudly sneers, “Aww-who cares! Jest another daid democrat!”

        The other people from Dallas nodded their agreement.

        At first I thought they were trying to ‘get one over’ on the San Francisco liberal.

        Then I realized that this guy was simply speaking as if he was still in Dallas.

        I imagined that this was how they referred to Americans who happened to be democrats.

        He had merely expressed a common point of view.

        I suppose my shock could be considered a form of political correctness but only by people who have no respect for civilized conduct.

        I was disgusted.

        I didn’t say anything but I experienced the comment as a stench and after more contact with the SBC office in Dallas I also realized that the stench of contempt for political opposition was pervasive.

        There were even ‘off the record’ meetings in which we were told why we should vote republican, we were even told that they knew that what they were doing was illegal.

        It was a foul corporate culture…it stank.

      • Rob, you are right, irrespective of political preference, that comment was uncalled for, especially when he should be trying to put his best foot forward when talking to merged associates. No politics, no religion. Keith

      • My first thought was, “You don’t know a fellow American when you see one?”

        For me, regardless of who he was as a man, John Kennedy Jr. came from a family that made some serious sacrifices for this nation.

        In my opinion even the reddest of the red-faced Red Staters have a duty to treat those sacrifices with respect.

        It was the utter lack of respect for the Son of one of out most admired Presidents that I found so shocking.

  5. Note to Readers: It should be noted what happens with the opposite of an engaged workforce. On the flip side of Nordstrom, some retailers treat their employees like chattel. As a result, there is higher turnover, store managers with difficulty staffing a floor and what may be worse – presenteeism. This means the employee is there in person , but not in spirit. Some even bad mouth the store to customers or won’t even speak to customers unless spoken to. I am sure many of us have been in a check-out line with a cashier who could not give a damn. Think of this attitude institution wide. Think of the lost sales as a result.

  6. The bottom line you treat people the way you want to be treated. I was the in between with the board members and owners and the supervisorsun and the aides that provideday service. I had the ear and respect of everyone. That’s not easy. I was let go because someone thought she could do the job better. While I was in charge I increasedon’t profits. For the company, I was able to convience management to pay more wages. A quarter more an hour but it was enough for them to see a change in their weekly check. That was 12 years ago. The two offices I built from nothing closed shortly after I let and my boss who was the son of the owner is selling used cars.

    • Kim, you had mentioned this on a similar post a few months ago. You understood the engagement question. Unfortunately, they did not fully realize your value to them until you left. Too many leaders don’t get this. Thanks for reinforcing the message through your experience. Keith

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