Alignment, Communication and Caring:
Still the Most Potent Employee Engagement Triggers in a Down Economy
By Ron Ausmus, Integrity Associates

Recently the business community has noted a proliferation of articles with the ominous message that top employees out there are poised to leave their present companies for greener pastures once the recession has ended. Some polls report that fully 50-60% of employees plan to jump ship when the economy rebounds.

Fears about such departures find support in some stable research showing increases in voluntary job changes when the employment picture improves following an extended season of layoffs. Another contributor is the growing prominence of younger workers, with their pre-recession patterns of unpredictability regarding employer loyalty and commitment. Another unknown is the impact a strong and durable recovery will have on the plans of a large group of older workers, who put off retiring because of the recession. Taken together, these can generate plenty of concern about future workforce instability.

It is demonstrably true that employee morale has taken a battering in many quarters during this extended period of economic malaise. CFO Research Services & American Express conducted a 2009 year’s-end study, where forty percent of companies admitted the downturn had worsened relationships with their employees. Remaining workers get saddled with heavier workloads following force reductions, and financial constraints have inhibited the growth of raises, perks and bonuses—the usual rewards for loyalty and diligence.

In this volatile environment, any insight into employee stability and performance can be crucial to planning and forecasting. Some media outlets put forth these dire, attention-grabbing predictions of the future, in the competition to stay ahead of the curve. We believe these projections of massive job changes by the best and brightest are over-blown. This has been a precedent-setting economic downturn and malaise in most of the Western world. It has already had a profound effect on investing, and patterns of consumer spending and saving. With the slow pace and uncertain strength of any recovery, we feel it’s extremely difficult to accurately forecast the effects on employee behavior. We are indeed, living in much different times than any during the preceding six decades.

Companies of all sizes differ widely in the deployment and treatment of their employees. Most have weathered tough economic cycles before, and the better ones know how to take care of their irreplaceable human capital assets during good times and bad. In the above CFO Research Services study, the more potent message is the statistical inverse that 60% of companies did not believe the down-turn had worsened relationships with their employees! We take issue with the embedded assumption that workers make most of their job commitment decisions based purely on self-interest-type considerations like pay, bonuses and promotions. It’s worth the trouble to dust off and re-visit some pre-recession research that probes worker engagement and job satisfaction, and the specific elements that influence job and company loyalty during much better times.

For upwards a decade or more, the issue of employee engagement has been carefully studied, with plenty of evidence of a mounting problem. Annual research by the Gallup Organization since ’01, affirms that roughly 50-55 percent of all U.S. employees are not engaged and basically in a holding pattern at work. Gallup estimates the cost to the US economy at somewhere between $292 and $350 billion per year. Other studies help quantify the norms of non-productive workplace behavior. According to a broad survey by AOL and Salary.com, the average worker—net of lunch and regular breaks, admits to squandering 2.09 hours of a regular 8-hour work day. Other estimates put that proportion as high as 40% of the time. Microsoft mounted a worldwide survey of over 38,000 employees, who affirm that they average only three productive days each week. And fully 70% of internet pornography is consumed during regular business hours.

In the face of the recession, overall productivity is showing some gains, so intuitively one might conclude that fears of being laid is driving increased employee diligence and a slightly higher level of engagement. Perhaps that may be the case with workers in middle groupings that separate the two extremes of engagement, but recent research by the Conference Board’s Corporate Leadership Council, asserts that the number of highly disengaged workers has doubled since the earliest stages of the recession in 2008.

What we’re mainly talking about here is discretionary effort, the difference between the minimum level of effort necessary, and the upper limits of which workers are capable. Like discretionary spending, it is completely a matter of choice. Performance consultant Emma Hammer puts the baseline minimum effort an employee needs to exert to keep from being fired at around 30%. She found that top performers over time, regularly maintained upper limits in the 80% range. That’s a very significant difference, further illustrating the gap between those who squander several hours a day gossiping and checking their Facebook pages, and others who push their personal limits to meet and exceed ever-rising expectations of customers, or the goals of their high-spirited work teams. Simple math suggests that one highly engaged employee puts forth an effort equal to that of about three just getting by with the minimums.

Engagement is a multi-faceted equation that describes each individual’s relationship with work. That includes the spectrum of feelings about their work activities, work unit and direct manager, as well as the worthiness of the company or institution that employs them. Levels of engagement and discretionary effort also co-relate with company loyalty and employees’ stay-or-leave decisions. A 2008 Blessing & White study of employee engagement and retention, found that workers fell into five distinct engagement categories, from the most highly engaged to the most disengaged. Those in the top group accounted for 29% of workers in the study. When compared with the other groups, this segment also showed the highest levels of both job satisfaction and employer loyalty. When asked about their plans to stay or leave, fully 85% of them affirmed their intention to stay for at least another year. These results resonate with an earlier Society of Human Resource Management study at Intuit, where the most highly engaged employees were found to be five times less likely to quit, as were the unengaged.

According to the Blessing & White researchers, the upper levels of engagement happen when there’s both maximum job satisfaction—"I like my work and do it well", and feelings of maximum job contribution—"I help achieve the goals of the organization." They further conclude that in large measure, highly engaged employees stay for what they can contribute, while the lesser engaged stay for what they can get. Of the highly disengaged, only 27% planned to stay another year, but the researchers surmised that a large portion of them would indeed stay because of favorable job conditions, and continue to conduct their job searches on the company’s dime.

Busiest Employees Actually Happier

Some paradoxical aspects of employee engagement are illuminated by research into the area of workload and job satisfaction. The busiest employees were found to be the happiest, according to a survey by Sirota Consulting, LLC. More than 800,000 employees at 61 organizations worldwide were surveyed, and those with “too much work” had an overall job satisfaction rating 8 points higher than employees admitting that their workload was too light. Workers with the heavier workloads were found to be more positive. They judged themselves to be worthy of the responsibility, and to have high value to the organization. This resonates with other research in call centers, an industry noted for high turnover. Reps who handle longer, more complex calls have higher levels of job satisfaction and lower turnover.

Another pre-recession study drilled down into a full range of elements relating to employee engagement, job satisfaction and company loyalty. During much of the past decade, the Corporate Leadership Council has studied the specific elements that influence employee commitment and retention. Their surveys probe a broad spectrum of several hundred discreet items, divided into two groups, "rational levers," and "emotional levers." Rational levers include all the self-interest-type items such as pay, benefits, promotions, assignments, work resources, training, mentorship and career development opportunities. In the area of emotional attachments, their studies probe dozens of factors that measure the extent to which employees trust, value and enjoy their work, managers, teams and organizations.

Emotional Levers Are Far More Influential

The CLC research has consistently found that organizations reporting the highest levels of both self-interest and emotional commitment also have the highest percentages of engaged and loyal workers. High levels of employee commitment based on the self-interest items, have corresponding high levels of intent to stay with the company. But when comparing the impacts of the two classes of motivators on engagement, the self-interest related commitment levers are not nearly so influential in motivating discretionary effort.

While the self-interest items did have some measurable influence on changes in discretionary effort, those were much smaller than today’s resource-constrained companies would imagine. Among the highest compensation-related influences were connections between performance and raises/bonuses, each at around 10%. The influence of base pay satisfaction topped out at 7.6%. Stock bonus satisfaction measured 5.5% and cash bonus internal equity at 2.8%, as elements influencing discretionary effort.

By comparison, some distinct communication patterns and specific manager behaviors, showed an impact on discretionary effort in the range of 20-33%. Inclusiveness and caring were highly influential levers. The supervisor’s commitment to diversity was the very highest manager-rated item, at 28.5%. Also in the top category were items like setting realistic expectations, giving quality informal feedback, putting employees’ interests first, and accepting responsibility for failures and successes. The study found a variety of ways to ask “the caring question”—the extent to which employees feel the organization in general, and the people they work under, really care about them. All those care-items showed strong engagement factors in the 21-26% range—about 3X that of the issue of base pay satisfaction.

Generations of Workers More Alike Than Different

Also receiving some scrutiny by both studies was the topic of the unpredictability of younger workers regarding employer loyalty and commitment. When comparing proportions of engaged vs. disengaged workers, the Blessing and White study found fairly wide disparities among age groups. Just 20% of the so-called Gen-Y or “millenials” were among the most highly engaged, compared with 32-33% of Boomers. Fully 25% of the younger age group were found to be disengaged, compared with only 17-18% of Boomers. Scores on other survey items led the researchers to suggest that the lower engagement levels could be attributed to unreasonably high expectations of the young, contrasted with the reality of unglamorous entry-level work assignments. So-called Gen-Xers—those between ages 33-45—fell somewhere between the two groups in both the highly engaged and highly disengaged categories, at 26% and 20% respectively.

One of the more surprising findings of the CLC study was the extent to which the dozens of specific loyalty and engagement factors they studied, revealed impacts with all demographic segments in very similar fashion. Responses from Generations X and Y employees showed only a 1.69% average difference when compared to responses of those over age 40. This strongly undermines the thesis that the younger generations of workers are resistant to the same motivators that fuel discretionary effort and loyalty in older workers. We conclude that in terms of motivating factors for engagement, the generations are much more alike than different.

Tell Me My Part in the Mission, and Align my Talents!

While a lot gets written about team cohesiveness, goals and rewards, these engagement studies reveal the extent to which employees want to be recognized and treated as individuals, and have their unique contributions fairly aligned and evaluated. In both the studies above, some seemingly mundane day-to-day communication Items were found to have impressive levels of influence on discretionary effort. High on that list were such things as communicating the organization’s goals, the importance of specific projects and the connection between the employee’s work and the company’s strategy—all of which showed engagement impacts in the 30% range in the CLC study. Researchers found these communication items to be potent factors from early on in employees’ tenure. When new employees first come on board, they want to immediately connect with the organization’s vision and strategy, and the importance of their own piece of it.

The Blessing and White study probed the communication and alignment elements in a much more limited way. Their focus was on having employees score a limited group of items that might lead to an increase in their engagement and job satisfaction. Those in the two lowest engagement categories chose "greater clarity of what the organization needs me to do and why" as the very top influence, at twice the rate of the other engagement items. Surprisingly, that item ranked higher than either "more opportunities to do what I do best," or the purely self-interest-based "better career development and training opportunities."

Managers will no doubt hear endlessly of boredom with current responsibilities, and beefs about the structural constraints they find limiting. Instead of dismissing these, stay attuned for corresponding clues of special capabilities, talents and career aspirations the employee has never shared before. And be aware that this can’t be perceived as just a cheap, one-time listening post from which no action or change will ensue. But don’t get drawn into making on-the-spot promises you can’t keep. Rather, look for ways to draw these employees into the continuing conversation and providing assurances that you are indeed willing to pursue making some adjustments and structural changes.

These conversations with low-to-moderately engaged workers often become the catalysts for ad hoc innovation teams that can radically improve job processes. From such a lively pot of raw material can come some fresh approaches like cross-training and cross-functional job rotations, with some of the principal actors already on board to help fashion and sell the implementation. Such initiatives can result in both improved job performance and morale, as the mere invitation to become involved can raise the engagement level of some bored and invisible individuals previously “lost in the crowd.”

When enough new trust is created, less-productive employees can overcome their feelings of vulnerability and admit the kinds of help they need from others in order to do better work. This clears a pathway for manager actions that can increase the engagement and job satisfaction for several others. For example, she can deploy some of her “high potentials” to mentor and coach those needing skill development or better interpersonal competencies. Given that promotions are restricted, the high achievers don’t have any place to go, plus they need opportunities to begin cultivating their own people-development skills.

It’s easy to see how a company’s better employees and managers become increasingly restless and cynical when they’re not given the opportunity to help shape the company’s future. Conversely, the companies that know how to harness the creative energies and insights of their employees across functions and ranks, prove to be the most agile and innovative during good times and bad. When top management has the courage and resolve to make listening and creative engagement a priority, they’re in a good position to give shape and purpose to the critical pieces of product and process knowledge that only their employees possess. Companies with leaders who leverage this vital source of information, often become the ones who continually rewrite the rules for their industry.

We’re convinced that most all employees truly want to be engaged with their work, and they want their companies to thrive. The immediate supervisor is the most influential face of the company. She is the one who interprets company strategy, goals and progress, with an eye toward creative innovation. All workers—and especially so-called “average workers”—need to hear that their piece is important. They value managers who know them and engage with them—who learn their strengths, give honest feedback, and listen to their ideas about doing it better. In a broad sense, they care about their work in rough proportion to how their organizations and bosses engage and care about them.

Little progress is made when companies and their shell-shocked employees just tread water amid the slump. As past down-turns have shown, there are new opportunities for those who seize them. Increased employee engagement and input can be a big driver of innovation, improved efficiencies, and higher levels of morale. The economic malaise is a great time for leaders with imagination and courage to reach out and cultivate fresh trust with their people. Such timely and sincere efforts can solidify tighter bonds of commitment and loyalty, while producing better results.

For a free culture mini-audit that measures levels of new employee engagement, click here