For many years the logic behind the service profit chain has dominated the way corporations treat their employees. The theory behind service profit chain suggests that satisfied employees create satisfied customers that in return stay loyal and affect corporate results.
This has changed with recent Gallup research that was unable to verify the link between employee satisfaction and results. It could have been that satisfaction used to give corporations an advantage, but failed to do so today. It could be that satisfaction has turned into a qualifying rather than a winning attribute of the organisation.
Gallup did however identify a clear link between corporate results and employee engagement. The “Employee satisfaction” concept has its roots in fulfilling of employee’s needs, wants and aspirations and is seen as something the corporation does for its employees. As such it is, for the employee a passive arrangement, where the corporation can decide what rewards it is willing to offer in return for the employee staying with the corporation.
The psychological contract between employer and employees is not limited to tangibles, but has been seen mainly as a rational agreement and as such something corporations impact though HR activities, predominantly compensation and benefits. Satisfaction can be improved by job safety, promotions, empowerment, appraisals, communication and similar activities focused on the employee and the job role.
The problem is that money and benefits above a certain existential minimum does not motivate people to do more as Gallup proved – the path to improved performance is not though increases in tangible benefits – but through an increase in engagement. So the bravest of HR departments has turned to measuring Employee engagement.
As in Gallup’s engagement surveys, most employee engagement survey show significantly lower results than satisfaction surveys, something that suggests a problem. No doubt a lot of management teams like the old satisfaction survey that could be done and ticked easily without rocking the boat.
The new engagement survey could be seen as a threat and not as an opportunity to gain competitive advantage. The other problem for the HR departments are that where employee satisfaction can be improved through systems and programs focusing on the lower part of the organisations, improving employee engagement is a completely different game.
Although in HR’s areas of influence - key elements in creating engagement, like personal growth and developments are a hard sell for HR in a rational skills focused world. Other areas of creating engagement are outside the reach of HR.
The newest neurological research of human behavior and decision making processes has firmly established the important roles that both emotions and social context plays as powerful modulators of what was once believed to be a predominantly rational process, which put us apart from the animals.
The Merriam-Webster’s definition of engagement: “emotional involvement or commitment”, confirms this is true for creating engagement also. Research suggests that engagement is influenced by the level of which employees identifies themselves with the organisation. The purpose, vision and leadership of the organisation play a vital role in engaging employees and the connection is emotional.
Why the corporation exist and what its purpose is become a potential powerful source of employee engagement. Unfortunately the post crisis corporations have had so much focus on improving profits that they have forgotten that creating profits is not a strategy – it is an outcome of a successful strategy.
Organisations that want to survive and thrive will eventually need to focus on a higher purpose that improves the situation of customers, employees and other stakeholders than just shareholders.
So employee engagement is not just something that can be designed by a HR department and injected into the workforce, it is about changing the fabric of the department or the corporation itself.
Employee engagement is not just about improving, it is about transformation. To transform people you need to transform the organisation and its purpose and goals. Visionary companies know this.
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