Engagement: More or Less Important Now?

Hopefully, as a manager, you have become aware of the importance of employee engagement. Hint: As it turns out, engaged employees do better work! Yes, I know, absolutely shocking. But, it’s true – those employees that feel genuinely connected to the company, feel valued by the boss, and derive satisfaction from their work, significantly outperform their disengaged counterparts.

Now, engagement is being more closely scrutinized in light of the current challenges in the economy. Is engagement as important when the economy is sluggish, companies are cutting payrolls, and the future is uncertain? If your intuition is that engagement is even more important now than ever before, you would be right. The American Management Association (AMA) recently published an article entitled, “Emerging from the Rubble: Reengaging Employees in a Post-Recession Workplace.” Turns out, engagement numbers are not faring so well in the economic downturn:

According to Watson Wyatt’s 2009–2010 U.S. Strategic Rewards Report, levels of engagement are down 9 percent among all employees, but down 23% among high-performing employees. This research found more bad news when workers were asked about the line of sight between their efforts and company performance. The number of high-performing workers who said that their performance goals are linked to their company’s strategy and goals was down 20% from 2008 to 2009. The number who said that their supervisors tie rewards to organizational performance was down 37% and the number who said that their performance objectives are motivating was down 24 %.

According to Gallup, about one-in-three employees considers themselves to be fully engaged, which is significant when you consider that employee engagement is directly linked to key business metrics like productivity, profitability, safety, and customer advocacy. Now, the Watson Wyatt research mentioned above indicates that number is declining further – and dramatically so among “high-performance” employees.

The Squeeze on Top Performers

This is where it gets tricky in the workplace. Engagement is critical to creating top performance, but with lay-offs, downsizing, and shrinking budgets, a company’s top performers are being asked to do more and more – and the result could easily hasten a company’s downward spiral.

Consider the following, from a May 2010 Harvard Business Review article entitled The Acceleration Trap:

Faced with intense market pressures, corporations often take on more than they can handle: They increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems…

We call this phenomenon the acceleration trap. It harms the company on many levels – over-accelerated firms fare worse than their peers on performance, efficiency, employee productivity, and retention, among other measures our research shows.

If companies increase the “number and speed of their activities,” why would productivity decline? Why would retention suffer? Is there a connection between the “acceleration trap” and employee engagement? It seems likely, although there is no specifically targeted research to prove the point. Clearly, the increased stress and pressure of additional activities and rising performance goals – in the absence of strong leadership and a strong culture – will adversely affect engagement.

All of this means that top performers can, in fact, be getting squeezed from both sides. Downsizing may create more workload for the remaining employees, and, at the same time, the company may now be adding projects and activities that further add to the workload, when they are, as yet, unwilling to rehire employees.

The Challenge for Managers

The challenge for companies is to create strong leaders, particularly in the mid-management sector. Average managers don’t typically look at high-performance employees and see trouble on the horizon, they see people who like challenges and handle them well. More work? Sure, they can handle it. Stellar performance; never complain….right up until the day they leave.

That is one of the key differences between an average manager and a strong management leader; the strong leader will pick up on the warning signs of a high-performance employee that is beginning to unwind. And, because they understand the value of building relationships and developing strong communication skills, they will have diagnosed the issues and created a solution for the employee that keeps them on board – and engaged.

“An inability to build relationships is the biggest reason why promising leaders derail. Also high on the list: poor communication and team-building skills.”   Five Rules for Making Smart Hires (Wall Street Journal)

In addition, the quote from the AMA article above identifies some key failures that managers have to rectify immediately: creating a strong line of sight between the employee’s efforts and company performance, and, creating compelling performance goals. Compelling to the employee, that is.

When a high-performance employee is not overworked and/or overstressed, the key is to let them see how their work drives the company forward (personal value), and provide them with the performance goals that motivate them (personal satisfaction). These are critical to driving engagement numbers forward.

Tagged as: employee issues, Engagement, Leadership, Workplace