What if your next job was not about salary?

Somewhere down the line, we made a mistake. We forgot that work is not about uncomfortable toil in return for tangible financial reward. It used to be so in the industrial age but those days are long gone.

Unfortunately most corporations still create non engaging jobs and most employees keeps accepting them. According to Gallup only 13% of world wide employees are engaged.

So how come companies still think we are motivated by money and most of us still behave like we are?

What if jobs were not only measured against the tangible reward that were offered but by the intangible benefits that the job might involve? Would companies create different jobs and would employees take them rather than high paying jobs?

These are the central questions in this brilliant article by Lynda Gratton of London Business School. Her recommendation is to include the intangibles into the job description:

• How interesting and engaging the job is
• The challenge and growth opportunity of the job both from a personal and skills perspective
• The job being non-routine and in danger of being automated.

I would like to add:

• Is it a job with independence, choice and responsibility
• How meaningful the job is to the corporation.
• The job makes the world a better place by tackling some of the large issues in society.

If you think your next job is about money then you should be ready to accept a routine, boring, controlled, non-developing, meaningless job without responsibility.

Is this your next job? 

Maybe this is your current job?

Honest Feedback is vital for Employee Engagement

If you want to create Employee Engagement you should invest in creating a culture of giving and receiving feedback. This is often confused with creating an environment of being friendly and although this is important it is more important to create relationships strong enough to be able to handle the truth (How to create a frame of honest feedback).

Gallup research has shown that a manager that gives mainly positive (based on strengths) feedback has more engaged employees versus managers that give predominantly negative feedback. What is more interesting is that giving no feedback is significantly worse that giving negative feedback.

As a leader you are responsible for growing your people which sometimes involves giving negative feedback. Research has shown that direct and honest feedback on wrong answers in tests has a bigger impact than feedback on what went well. 

When people are encouraged and allowed to grow employee engagement increases. To grow people need feedback that also means negative feedback.

Knowing that negative feedback also creates employee Engagement should be sufficient to encourage leaders to have difficult conversations with their people – ignoring the conversations are too expensive.

In the book “Crucial Conversations” the authors introduce the concept of the Fools choice: “The choice between friendship and honesty.” 

It is a fools choice because no friendship can be based on dishonesty so a crucial conversation is necessary to give honest feedback

"Our lives begin to end the day we become silent about things that matter" Martin Luther King Jr.

Are you running your company like an old communist country?

It is generally accepted that the wall fell as a result of the actions of Regan and Gorbachev although it probably would have fallen anyway as a result of the systematic and serious failures that evolved inside the totalitarian system.

You would think that companies most often are managed by principles derived from capitalism and while this might be true there are a large number of companies that have adopted similar vices to those of the former communist countries in the world.

The question is if what is likely to have caused communism to fail is a good foundation for a long term sustainable strategy aimed at creating engagement with both employees and customers.

Test your company against the doctrines below and find out if you are facing obsolescence:

1. Power is concentrated on few hands

A significant issue of the communist countries was the limited number of people that had authority to make real decisions regarding resource allocation in strategic and operational situations. A culture of delegation assumes that the top leadership of the company are better qualified to make all decisions on the corporation’s behalf – in short they know better. This kind of “Politburo” structure fights empowerment like the body attacks a virus – the distribution of power that is at the core of empowerment is a sacrilegious concept that cannot even be discussed. A concentrated power structure isolates the leaders from the organisation and alienates the employees and the customers rather than engaging them. Organisations that successfully engage both employees and customers have 240% better performance according to Gallup.

2. Information access is limited and decision making processes are not transparent

A relic from the industrial age where information was key to competing it is now mainly used by poor managers to cement their power position. Very little information can be considered so proprietary it should be kept from employees. The social revolution is changing the way that information is used inside companies and it is also making it very difficult to keep decision making processes secret when all stakeholders have the possibility to instantly spread uncomfortable secrets immediately.

3. The leadership is not democratically elected.

In principle the board and though them the CEO should be (s)elected by a democratic process that operate by shareholders voting rights. In many companies this process is not as many shareholders don’t exercise their voting rights. The largest stock holders in the world are pension funds managed by professional managers, not by their true owners. This means that rather than owners voting for managers to take care of their best interest, it becomes a case of managers voting for other managers / with that the danger of managers acting in their own best interest rather than the owners. One of the signs of a “Politburo” is a board with members that has not changed for many years and always sides with the CEO.

4. The company has a lack of purpose

If you have a mission of becoming the “Very best company in the x industry” you are probably not the most purpose driven company in the world. Instead you are likely to have a focus on serving “shareholders”, which sounds a lot better that senior management serving themselves. It is important to have a strong purpose that can attract and engage employees, customers and other stakeholders if you don’t want to compete on price alone. If your leadership team are defenders of status quo – they are likely to be a Poliburo:  The society for the preservation of senior management.

5. Doctrine based thinking

The only argument for concentrating power on a few hands is the assumption that they no best and are best equipped to manage the company. When this becomes the case there is no real reason for seeking information or advice outside the power structure. As people are isolated from the real world doctrine based group think starts to kick in. Decisions are based on assumptions that might have been true once but never gets revalidated. It is particularly dangerous if it gets combined with short term financial results that can give the illusion that all is well. Short term results can be made by stealing from long term results.

6.  Strategies that benefit few

If a politburo structure enters a company so does entitlement. As the power circle constantly reinforces their own importance the companys strategy turns to serving the few that matters. In strategy creation the interest of other stakeholders will start to be underserved to give to the few. Starving customers and employees can create short term results and with that the illusion of success. When CEO’s make more than 500 times the pay of ordinary workers, it is a sign that the company has started to serve the few. These strategies are rarely sustainable in the long haul.

7. Central planning structure

The Politburo owns all the money and need to concentrate resource allocation and planning to a central point. The focus turns from investing in new equipment, people and in new business opportunities to a focus on efficiency. More effective P&L or Balance sheet control of business units is replaced with a micromanaged central structure where everybody has to make endless request to just get the minimum for the business survival. It is a great way of starving the business at the same time as being able to blame the individual units of not contributing.

8. Policies are designed to limit people, not enable them

The bureaucracy shows its face once the company’s policies turns from guiding the people to starting to control and limit them. Policies will move from enabling everybody to be a mean to only protect the company interest and money. When the health and safety policy that should be designed to protect the employee turns into a 50 page legal document that describes what will happen to an employee that does not follow the rules – then you know you have turned into an old communist country.

9. Staff functions transform into secret police

When policies change to protect the company, a similar change can take place in the staff functions. Originally designed to support the business with financial, people, legal and IS support the staff functions start to control, check and report behaviour that can be deemed dangerous to status quo. They start to resemble the security police in the old communist states. This has a significant impact on employee engagement and instead of seeking new ways of doing things and creating value, employees gets trained into low profile, low risk behaviour. Don’t spend any money, do make any requests and don’t challenge status quo.

10. Lack of engagement kills productivity, initiative and innovation

When employees understand that they are not encouraged or rewarded for taking initiative, learning and experimentation stops. Productivity growth will start to decline compared to high engagement organisations although it can be hidden by the results created though starving the company. With the concentration of information, a focus on low risk behaviour and low employee engagement – innovation will stop. Innovation can only happen if people are allowed to challenge status quo and the doctrines of the corporation – this is one of the key reasons the old communist countries did not survive.

If your company share some of the characteristics of an old communist country it might be a reason to start looking for healthier doctrines that enable employees and engage customers. 

You cannot run a 21^st century company based on 20^th century management principles.

Are you still involved in skilled based recruitment?

For many years through the industrial and knowledge age, skills have been imperative when recruiting people. Are they capable of operating the right machine or be part of the right department. However work is changing and people are now entering corporations with a job title that are not likely to survive many years – we don’t even know what will be needed a few years from now. Marketing has gone from paper and television to online and mobile at a blistering pace rendering the entire skill base obsolete. The same thing is happening in sales, where customers has access to more information than the salespeople and are capable of identifying the best deal without even calling.

“Companies are running 21st-century businesses with 20th-century workplace practices and programs.” Towers Watson

Need for specific skills are changing at a rapid pace.

If the obsolescence of skills is accelerating, it does not make sense to hire for skills alone anymore. A better way is to combine skills with attitudes and behaviours when recruiting. Define the attitudes you want in your company – they are likely to interact with your values and culture and the basic belief system your company is based on. They should also be the first evaluation process that existing and new people are evaluated against as attitudes are hard to change. A very imortant point is that the attitude of an employee is going to decide if your culture and operating logic is able to create engagement - a key element of motivation.

"Getting an employee with the right skills is not the same as getting a motivated employee"

Secondly it is needed to look defining the behaviours you want. On LinkedIn it is possible to get a good idea of behaviours of a candidate that can be explored through the interview phase. Even though you would like certain behaviours it is more important to look for the potential of behaviour you would like to have in your company as behaviours can be coached.

Skills should really have the last priority and you need to be looking for the potential to acquire the necessary skills and the ability to acquire future skills. Whatever you are looking for right now is going to be obsolete faster than you can believe.

Pulling it all together will help you identify your high performance A Players that exhibit the desired Attitudes, Behaviours and Skills you are looking for. B Players that have the potential to become A Players and finally C Players that does not have the potential.

Using the 3 Gate process will ensure that you get the right potential people into your organisation but not that they are motivated and engaged. Engagement is an emotional relationship between the employee and the company that the company is responsible for creating. It is not a characteristic of the employee.

"With high levels of engagement, firms can see revenue growth 2.5 times that of their peers and a 40 percent reduction in expensive staff turnover" HayGroup

The 3 dimensions of Fairness that Impacts Employee Engagement

What is fairness really?

When most people talk about fairness, they talk about the concept as an absolute and objective term, things are either fair or they are not. This is also how people behave although it is blaringly obvious that even two people can disagree on what is fair. If fairness truly was objective we would have no wars, sufferings or extreme inequality – there would be enough for everybody.

Fairness is a very subjective concept and it is shaped by age, culture, religion, age and a whole host of other dimensions. Fairness also changes according to context; in scarce situations like who should have the last bottle of water in a desert, people’s perception of fairness changes dramatically.

Anybody that has been in a situation they deemed unfair knows that the response is instantaneous and can be quite powerful. This reveals that fairness is hardwired in the emotional parts of the brain, in particular the amygdala – where also anger gets trigged and the two often works in concert.

Why fairness impacts Employee Engagement

For companies the fairness concept really is a tightrope that needs to be walked. If you trip, you risk getting a powerful emotional response from people that can have a dramatic and instantaneous impact of the engagement levels – disengagement can increase very fast.

Fairness is also a positive engagement factor but it builds slowly over time as the company demonstrates that it is a fair company. Communication strategies cannot only be built around rational business strategies and decisions – it will need to respect the fact that fairness is emotional in nature.

The 3 Dimensions of fairness

Taking a deeper dive into the concept of fairness, reveals that there are three dimensions that needs to be considered when dealing with Employee Engagement and the fact that they interact.

Fairness towards Self

The relationship between the employee and the employer can be seen in the light of fairness. The tangible elements of fairness are what the employee gives in terms of presence and effort compared to what the company gives back in pay and benefits. The tangible elements of fairness are closely related to satisfaction but not much to motivation and engagement.

The intangible elements of the relationship, like how you are treated, trusted and listened to combined with other leadership and cultural elements has a high impact on how motivated and engaged the employee is. Engagement is not about money – it is about how you treat people.

Fairness compared to others

Another dimension of fairness is when employee compares their situation to those of others. This could be colleagues, leaders, similar groups outside the organisation. When employees start to compare their situation to others, their perception of fairness can change very rapidly. What they were happy with a second ago is now completely unacceptable when they have seen what the others get. This is key in designing engagement, you need to either be transparent and up front or be secretive if you have very differential pay or treat people very different.

Fairness towards others

The last dimension is about how fair the company treats others and can have a significant impact on the engagement. Companies that only focus on shareholder value are typically short term oriented and see conflicts between the shareholder and other stakeholders like workers, customers, society and the environment.

Fortunately a lot of the younger more successful companies are built on a foundation of a strong worthwhile purpose and know that serving multiple stakeholders eventually benefits the shareholder. If a company treats all stakeholders well and respect them their reputation, brand and image as an employee grows. This can significantly increase employee engagement.

If you want to create engagement in your company you need to be able to manage fairness along the three dimensions

Everybody talks about Employee Engagement - can anybody define it?

There are many definitions of Engagement, some more academic than others but one of the simplest was made by David McLeod in his report to the British Government of the state of engagement in the UK: 

“You know it when you see it”

It would be very easy to accept the term “Employee Engagement” as a more modern or advanced description of Employee Satisfaction – a term we all understand. This assumption makes most people misunderstand the concept and power engaging people.

The CAB model highlights some of the key differences between Employee Satisfaction and Employee Engagement:

Where Employee Satisfaction is a rational state that is based on what the employee deliver in terms of work compared to the benefits received, Employee Engagement represents an emotional relationship. This relationship is not only to the company itself, it extends to all the company’s stakeholders and to the company’s purpose.

This also reveals that Engagement is not only about the exchange between the company and the employee but also about other exchanges between the company and its stakeholders – exchanges that does not directly impact the employee.

As Engagement is a complex relationship it challenges the traditional industrial HR view of the world. It is not viable to identify humans that “have engagement” therefore it is not possible to hire and fire your way to Engagement – you have to create it. You have to change from selecting and changing the employee to fit the corporation to change the corporation to fit humans.

Gallup that regularly surveys the state of engagement worldwide defines engagement as different emotional states employees are in.

They highlight that not only is Engagement and opportunity, it also represents a threat as disengaged employees are working to sabotage the organisation.

The Institute of employment studies has a definition that highlights it is not only about what you do, but also how you do it:

“A positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of the business context, and works with colleagues to improve performance within the job for the benefit of the organisation. The organisation must work to develop and nurture engagement, which requires a two-way relationship between employee and employer.”

Engagement is strongly connected to motivation – especially intrinsic motivation like passion, purpose and personal growth. Extrinsic motivators like pay and working conditions can impact negatively but does not have a positive effect.

This also means that Employee Engagement can be seen as a hierarchy  – like the surgeon model to highlight the impact that Employee Engagement has on the subjects – be it customers, colleagues or patients.

What is needed to bring employees from Disengaged to Engaged is very different from what it takes to move them on to Actively Engaged.

This also highlights that the creation of Engagement is not a prescriptive process that can be standardised like most people processes. Engagement is a strategic process that depends on people’s current level of engagement, the company, the market situation – it has to be tailored.

The creation of Employee Engagement is extremely important as it impacts: Motivation, Company performance, Learning, Knowledge and Innovation.

Additional Definitions of Employee Engagement:

"Full discretionary effort and living up to their full potential and doing what it takes to help their organisation succeed." Towers Perrin

"Engagement is a positive fulfilling work related state of mind that is characterised by vigor, dedication and absorption." Schaufeli et al

"Engagement or passion for work involves feeling positive about your job as well as wanting to go the extra mile to make sure you do your job to the best of your ability." Truss et al

"The extent to which the employees commit to something or someone in their organisation, how hard they work and how long they stay as a result of that commitment." Corporate Leadership Council

What engages employees is not the same that attracts and retains them

The view of humans as resource often leads corporations to think that people are motivated in a uniform way and motivate the same in all circumstances. This leads to a narrow people and policy strategy centered on the classical functional areas of HR, ignoring that people are motivated differently according to their situation, their age, their tenure and what company they are working for.

The Gebauer Attraction, Retention and Engagement Model serves as a reminder to tailor people processes to the task at hand

It is also a reminder that the creation of Employee Engagement is not a low level process that can be automated in the HR department. Engagement needs to be designed into the fabric of the corporation, it purpose, the way it believes in people, the way the corporation plans, strategizes and communicates.

“Employee engagement is not about changing people, it is about changing corporations”

Design your Engagement Survey so that it creates Engagement.

Although many companies has understood that having high scores in satisfaction surveys does not correlate strongly with customer satisfaction and financial results anymore, they are struggling to understand why and what to do about it. Some companies have found that having high employee engagement impacts customer engagement which in return does create positive financial returns for the corporation, but don’t understand how to increases employee engagement. The increasing importance of employee engagement and the resulting lower importance of employee satisfaction have its roots in the generational mixture of the corporation in question.

The new generation is very different from Baby boomers (born 1940-60) that was motivated by duty to the corporation they served and  generation X (1960-80) with a focus on individual return versus the sacrifice of serving the corporation. Generation Y (1980-2000) is only loyal to the corporation if it serves a higher purpose, listens to them and invests in them.

This is very important to understand when designing an engagement survey for a given corporation. The questions themselves can create or destroy engagement – make sure you ask the right questions.

To create additional engagement you should think about including questions about the future direction of the corporation – get the employees opinion of what is important. The fact that you ask will increase employee engagement and if you ask questions about the future purpose of the corporation it will go even higher. GenY is motivated by purpose in opposition to Baby boomers acceptance of a focus on shareholder and the more personal gain/sacrifice view of GenX  motivated through profit sharing .

If you accept that pay itself does not motivate (too little can demotivate however) this is an overview of what motivated the different generations:

	Motivated by	Willing to	Activity should   benefit	Employee measurement
Baby Boomers	Duty	Sacrifice	Shareholders	Retention
Gen X	Balance	Sacrifice for personal gain.	Shareholders, Management and Employees	Satisfaction Survey
Gen Y	Purpose	Engage in return for benefits to society	Society and environment before corporation	Engagement Survey

If you lose the Millennials – you lose!

Corporations with long tenure in mature industries often operate based on a number of principles that is reasonably stable. The most important one is that the future success of the corporation is based on the same principles as the historic success. The leads to an operating principle focusing on continuous improvement: Evolution over revolution or small incremental changes to what was done last year. The model is also based on a view of the market as a place with stable boundaries and actors that are quite similar and unchanging - a place of competition.With the rise of first the internet and later the revolution of social networks, unlimited power of the cloud and the rapid move to mobile technologies, no industry is immune to disruptive changes.It is well known that the disruption can come from a change in product offerings, like the iPhone changed the mobile industry. It can also come from outside the market boundaries like Google’s absorption of advertising budgets or it can be a disruption of the supply chain the way Blockbuster died from Netflix competition. Most mature companies are aware that they need to keep an eye on changes in the market structure, customer preferences.
There is however a significant change underway that will fundamentally change the way corporations has to operate in order to succeed independent of what industry or market they operate in. The rise of the Millennials or generation Y as people born in the 1980 -2000 time span has been categorised. This is not a surprise to the marketing departments of consumer based corporations – they know Millennials are different customers to the prior generations (generation x and baby boomers) and work hard to position offerings attractive to them.
What seems to come as a surprise is that Millennials are also becoming a significant factor as employees. 

Before 2020 Millenials and younger generations  will become the dominant part of the labour market everywhere, and most of them will work in an environment designed by generation X for generation X. This is likely to fail, just ask your marketing department.

Beyond.com survey, 2013

A survey done by beyond.com shows that the gap between Millennials perception of themselves and that of HR professionals are very different, This indicates the expectations of the corporations based on Gen X thinking and that of Millennial employees are very different – a recipe for disaster.

The problem has still not become visible as very few corporations has been in talent acquisition mode since the financial crisis but as Gen X moves towards retirement it will become an issue

It is easy to point fingers at HR and HR policies and blame them for not adapting to attract and retain the new employees but the problem goes a lot deeper. Millenials don’t see work as a chore like the baby boomers and they don’t see it as means to an enjoyable life outside work like generation x. They are hard workers but not motivated the same way as earlier generations.  Millennials want freedom, trust, support, fun and they need a higher level purpose to really engage. Corporations need to develop a purpose above and beyond profit and revenue. To attract and keep Millenials, it is imperative to create an environment of personal growth, equality, Social/Environmental responsibility, freedom and team spirit.

Are your company’s policies designed to enable employees or limit them?

This might sound alien to companies firmly based in command and control thinking but it is already being implemented by successful companies in the new economy. Google, Amazon, Netflix, Tesla and similar companies are ahead and design their people policies very different.

You are not only competing with these companies for the consumer

 You are also competing with them for the employees.

Act like you are alone and in a start-up scenario (Because you probably are)

Working in large companies in mature industries you are likely to feel a degree of safety and security in your employment. There is an illusion that it is a lot safer than being on your own in a start-up situation. This might not be the case at all and you could benefit changing your mind to think like an entrepreneur.

The illusion of safety

In mature industries, companies often follow a red ocean strategy of direct competition with like minded competitors – deliver more for less – every year – until somebody changes the rules. The company is likely based on a long and glorious history of growth, results and acquisitions and is founded on the logic that history success guarantees future success. This logic works fine until somebody decides to change the rules of the market through disruption. Size and capital is not the guarantee for survival it used to be.

Even if you are a great employee and the company want to keep you they might not be able to in their fight for survival. Maybe it is time to pretend that you are on your own and fighting for relevance in an environment that is changing faster than ever (because you probably are)

Is your behavior locked in the logic of your industry?

Many employees follow a strategy similar to the red ocean inside the corporation. The impression of collaboration coexists with hidden competition amongst co workers: Deliver more for less until you get chosen for promotion.  This competition for reward and promotion is rarely expressed but nevertheless very real and permeates the decision making processes:  Who are favored and gets the power. You are not likely to get your promotion by competing: Doing more for less. There is no logic in promoting hard workers.  If you don’t find yourself in this situation, you won’t feel envy when your colleagues get promoted instead of you – you will keep working hard until it is your turn or you don’t want promotion at all.

Is there another way?

If you do have ambition, it can be worth looking at the company the way many start-ups look at the market they want to engage. Rarely do they choose to battle the industry leaders head-on in a red ocean strategy but rather follow a blue ocean strategy.

Red Ocean Strategy	Blue Ocean Strategy
Compete	Complement
Beat Competition	Make competition irrelevant
Exploit exiting demand	Create new demand
Work with value cost trade off	Break value cost trade off

Rather than competing with your co-workers – find ways of complementing what they are already doing. Explore new ways of creating value for the organisation outside the current scenarios. It might not be easy but this is what new start-ups face every day and you can learn from that. You will have to challenge the existing thinking and the rules they are based on, and you are likely to face resistance. But if you don’t, you might find yourself competing with somebody willing to do your job cheaper or you will be competing with a machine.

If you can’t win – change the rules

Peter Diamandis

Competitive advantage can only be created through people.

Since the financial crisis the focus of some corporations has turned from a desire to create value to a perceived need to extract value from their existing business. This has mainly been achieved by starving the existing business through headcount reductions and outsourcing of corporate support functions to cheaper jurisdictions.

 Included in the cost savings has been customer direct and indirect support functions – in reality revealing that these corporations has limited belief in these functions as assets able to deliver revenue and growth to the corporations. This also means less delivered to the customers for the same price; as a CEO of an insurance company put it: “A more disciplined offering to our customers” – a lyric formulation for less.

Reducing frontline employees is a dangerous game as automated response systems and web based support might not be able to create the emotionally connection with customers that most corporations marketing campaigns are based on. What customers expect and what they get will be quite different – automated and generic response does not create engaged customers.

These kinds of headcount reduction and reductions in funding to training programs, maintenance of equipment and R&D to improve the bottom line has not exactly been rare. There might not be anything legally wrong with doing this but ethically there can be issues.

From a governance issue, under-investing in people and under-investing in the revenue generating part of business is considered stealing from the future to benefit today. This is especially a problem when executives are paid based on P&L metrics and share compensated affected heavily by earnings per share. It could be seen as stealing from the future for own personal gain.

The increased cashflow from these activities has predominantly been reinvested in the company’s own equity as pointed out in the Harvard Business Review article: Profits without prosperity, with increases in share price as a result. The problem is that this is not an investment in the business future and based on assumption that the existing base of competitiveness is relatively safe. Companies might believe there is safety in size, like Kodak did or safety in technology as Nokia did. They might think that their brand is the strong enough – like Blockbuster or Motorola did.

Unfortunately for these companies there is a new breed of predator in the corporate jungle. Companies like Google, amazon, Netflix, Tesla and Apple are redefining the rules of the game in ways the more mature companies has no response to within their current way of thinking. 

The mature companies think that the new companies have created their competitiveness through people-less assets like computers, artificial intelligence, automation, robots and Internet based offerings and assume that reduction in headcount is the way forward.

What they have failed to understand is that all of these companies only create competitive advantage through their people and not at the expense of their people. If they wanted to take a closer look they would see companies highly focused on getting the right kind of people, making sure they are continuously developed and satisfied.

These companies know what is well established outside the economic and financial circles – probably also in these circles but not stated publicly – that human beings are not only rational people but more importantly emotional beings that are affected by the social context around them.

They make sure that their employee are not only rationally connected to the companies though satisfaction but more importantly connected emotionally through engagement. Connected to the purpose of the corporation – the “Why” of the corporation.

These companies also have a belief that employees are the only true source of competitiveness, even if it manifests itself through products, systems, knowledge or other employee made artifacts.

Employees make a difference. Employee engagement matters.

Employee engagement is not something you do to people – it is something you do with people.

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.