What do companies like J.M. Smucker, General Mills, and Marriott Hotels know that seems to elude many of their competitors? What’s one thing that has contributed to each organization’s decades-long record of growth and profitability?
The answer may lie in a paraphrase of an advertising slogan long used by Carnation Milk, “Contented cows give better milk.” Translation: satisfied, engaged employees give better performances, which results in better business outcomes.
Employee Engagement: Whatisit?
We could give you a big long, impressive definition of engagement.
Or...we could show you.
This is engagement
This is not
How into your job are you? How connected do you feel to the organization whose name appears on your paycheck? How much of your career can you see spending there? How much of yourself do you put into your work, because you want to, not because you have to?
The answers to these questions define the term Employee Engagement better than any dictionary-style definition we might offer. More than employee satisfaction, engagement speaks to a deeper emotional bond between employee and employer, a bond that drives individual and group performance, and has a direct bearing on business results. In fact, our firm’s research over the last 18 years shows that an intentional strategy of having a focused, engaged, and capably led workforce is one of the best things any company – large or small - can do for its bottom line.
Employee Engagement is closely related to Discretionary Effort. The two are not synonymous, but Discretionary Effort is a huge part of Employee Engagement. Identified in the early 20th century, Discretionary Effort (DE) can be defined as "that increment of human effort the expenditure of which is at the exclusive discretion of the worker." It's the difference between what we're capable of... and what's required of us to keep our jobs. And by definition, we choose how much DE we'll give to our employer every day...and how much we'll hold back in reserve.
The leader's job is to create an environment in which people WANT to give as much of the Discretionary portion of their Effort as possible.
People who part with copious amounts of Discretionary Effort set the alarm a little earlier, because they can't wait to get to work (not because there's something at work that can't wait). They pitch in and help when their work is finished. They help solve problems. They go above and beyond, the extra mile. They take initiative. They focus on the job's objectives, not just its tasks. They're customer-centric. And they're profit machines. These are the people you want. You want to attract them, hire them, and retain them.
Employee Engagement: Why do I want it?
In our most recent book, Contented Cows Still Give Better Milk, we were able, once again, to put forth a compelling business case for Employee Engagement. In this go-round, a sequel to our 1998 work, Contented Cows Give Better Milk, we compared the financial performance of 12 “Contented Cow” employers (companies with stellar employer reputations and strong strategies around people practices) to the performance of the economy at large. Over a ten-year study period, our corporate exemplars managed to outperform indices of the U.S. economy by a substantial margin and make some serious money for their investors.
This was our third such study, and no matter how we slice it, the numbers keep pointing to our original premise: how you treat people at work matters. Especially if you enjoy earning a profit.
And yet, Employee Engagement is facing some formidable headwinds. A 2015 study by Gallup shows that only 32% of the American workforce is truly engaged at work; more than half, 51%, fall into the category of “not engaged” (getting the work done, but just barely); and 17% are “actively disengaged”, sabotaging the efforts of the ones who do want to be there. I don’t know about you, but I know that most businesses, including ours, can’t afford to operate with 68% giving less than everything they’ve got.
Employee Engagement: How do I get it?
So how do we get a more fully engaged workforce, one whose output shows up in a better bottom line? It’s not as easy as upping compensation or plugging in the latest, most elaborate and costliest employee perks. Instead, today’s best and most profitable employers focus on sound organizational and leadership practices that get the most—willingly and enthusiastically—from everyone on the payroll. Here are three things you can begin doing right now that will have an immediate and long-lasting impact on your company’s ability to succeed through its people practices.
Hire for fit. Skills and experience aren’t enough. Identify what it takes for people to be happy, productive and successful in your organization. Sit down with your senior leadership team, and identify those non-technical ‘fit’ requirements – things like strength, attitude, heart, and passion. Teach those fit requirements to all hiring managers and provide incentives for hiring around those factors. Use behavioral interviewing techniques to identify those candidates whose values and attitudes set them up for success in your organization.
Define your mission in clear and compelling terms. I’m not talking about having the best-worded mission statement in the world, but having a clear sense of mission is motivating. Make sure everyone—from your CEO to your newest hire—knows why your business exists, and can articulate its most important priorities.
Here’s something you can do right now to see how you’re doing in this department. On a piece of paper, write down what you believe to be your organization’s top three business priorities. Put the paper in your pocket and go out and ask the first five or six employees you happen to see the same question. Compare their answers with yours and with each other’s. Should the answers stray too far from one another, you’ll know it’s time to get busy focusing everyone on what matters most.
Teach people how their work matters. One of the most important engagement factors is having meaningful work. The minute someone loses sight of the importance of his work, he can’t possibly perform at the top of his game. If some of your workers have forgotten (or never really knew) how their daily work matters to your customers and the rest of your business, teach them.
Get your back office professionals out on the manufacturing floor from time to time. Let machine operators accompany your salespeople on customer calls. Send your HR manager out to see your products being used. Those are but a few examples of how you, as a leader, can help to make meaning out of people’s work.
Business leaders can learn a lot from dairy farmers. Leaders who hire well, articulate a clear mission, and help people understand how their work impacts the business will get a greater measure of engagement from the best and most talented people in the business, resulting in better business outcomes. Contented Cows Give Better Milk.
We can bring the message of Employee Engagement to your organization.