Beyond fluffy: has engagement become nothing more than a cliché?

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Engagement is big business. Companies deemed to have highly engaged staff secure valuable publicity if they make it onto lists such as the CRF Institute-run Britain’s Top Employers list, or The Times Best 100 Companies to Work For. But is there a risk that the purpose of engagement – ensuring colleagues apply themselves to their jobs, for a better overall performance – is being lost in the race for points? Is employee engagement becoming nothing more than a cliché?

Helen Giles, HR director at charity Broadway Homelessness and Support, has reservations about the measurement of engagement. "I'm as good or as bad as the next HRD in being anxious to get our employee engagement index up," she explains. "Yet on occasion, I am beset by doubts that our quest for greater engagement is subject to the law of diminishing returns.

"Perhaps it's because I spent too much time analysing our Best Companies data and noticed all the questions are about how good people feel, with barely a nod to how conscientiously they apply themselves to their work. Or because not long ago I was in a room with a group of HR academics getting terribly excited about how employers can create greater 'meaning' for their employees."

Jill Brady, director of HR and external affairs at Virgin Atlantic, agrees. "Engagement has become something of a buzzword," she explains. "It is used as shorthand for a lot of things, and perhaps the core idea that engagement will deliver results for the business gets lost in a blizzard of surveys and 'initiatives'." She thinks, coming out of recession, employee surveys can be a way to gauge attitudes - exploring whether people are still proud to work with you, and how happy they are. "But the real commercial benefit comes when actions are taken on the findings, driving broader business strategy," Brady adds.

Virgin Atlantic has a well-established, inclusive, consultative culture that means employees stay loyal and are driven to keep improving the customer service for which the airline is famous. Brady says the company's engagement strategy is simply, yet robustly, a means of facilitating high-quality feedback from frontline cabin crew and ground staff. "We did a big engagement survey last year, really asking: 'Where do we make it hard for you to give fantastic service? What can we do better?' So the survey is very much about improving the business. If colleagues tell us they need more access to information to answer passenger questions, we will instigate the right tools to make it possible. Often practical things are needed - systems and processes - and it helps that our people can see the improvements being made."

In 2010, Virgin also carried out roadshows with employees to reinforce the company values and allow people to discuss what it means to work at Virgin Atlantic. "People were invited to share their most memorable experiences during their time with the company and through this personal story-telling approach we got a dialogue going about how the company operates and what we do," says Brady. She says staff committees set up in summer 2010 are also serving to maintain high-quality feedback from the front-line, and investment in training for line managers is beginning to deliver results, as staff benefit from "great performance management".

David Kast, head of human resources at corporate travel company Hogg Robinson, agrees that many organisations only pay lip service to engagement. He says Hogg Robinson's approach has been to retain an approachable "family culture", where it is easy to share problems and access the views of others. This is facilitated by a powerful and widely used intranet and having in place well-trained line managers, with properly managed performance review and recognition programmes.

"We also focus greatly on how we communicate, with an emphasis from the top on being frank and open about what the business needs," explains Kast. "So, for instance, during the recession, we launched an initiative called 'Options for Change', which offered sabbaticals, unpaid leave, voluntary cuts, in order to tackle costs without resorting to major redundancies. The needs of the business were spelt out clearly by the CEO," adds Kast. "By being honest, having adult conversations and communicating openly, we had a magnificent response and a positive take-up. A year or so later, we could pay back the salaries that had been sacrificed and even deliver a bonus. It showed everyone that saying 'we need your support at this time' was very worthwhile. People felt engaged, and it has meant we have retained highly valuable people through the tough times." This can be seen as strategic-level engagement, affecting how the business is run, rather than thinking about engagement in isolation.

Brady feels there's little point in digging out return on investment figures for these kinds of engagement-building activities. "The vast majority of organisations know in their hearts that spending more on training line managers will deliver better performance," she says. "You don't need consultants to come in and translate that to a bottom line figure. I'd rather hear employees tell us what needs to change and know those improvements will deliver a better experience for customers. I don't really need a figure on that."

The independent Employee Engagement Task Force, set up by the Department for Business, Innovation and Skills in March, will work hard to ensure engagement rises up the agenda of UK plc for all the right reasons. Task Force chair David MacLeod says his Engaging for Success report identified a clear distinction in the UK between the organisations that are doing surveys and carrying out limited work on the findings (Level One) and organisations that have grasped an understanding of the transformational benefits of engagement and are seeing results (Level Two).

"So there are plenty of examples of employee engagement being done properly," says MacLeod. "For others, there may be confusion about what engagement is all about - is it happiness, work/life, balance, job satisfaction? We believe you have got to come at it from the performance angle. For the Task Force, employee engagement is about how you can harness the full capability and potential of your people. But that must be willingly offered. When you get that from employees, you see better customer service, higher levels of innovation and more commitment to finding efficient ways of doing things."

He acknowledges there is a risk that if annual surveys are carried out, but no further action is taken, employees become disillusioned. "I know of one company where morale goes down when they do their employee survey, because staff have taken time to fill in questionnaires for three years running and don't see any changes being made," says MacLeod. "Our advice is: Yes, do the surveys, but do not think doing it and delegating a few actions will result in improved engagement."

How big a task lies ahead for the Task Force? MacLeod believes one small camp of employers is totally convinced employee engagement delivers commercial results, while another small camp doesn't believe in it at all. "But the vast majority are in the middle. They are interested in getting results, but they don't believe in it passionately," he says. "To make change, we need to show proof, and kick-start the passion. Thousands of organisations out there still want to know that pursuing engagement is time well spent, so the work of the guru group and practitioner groups will be largely about sharing ideas and best practice. It won't be a 'painting by numbers' exercise, but by changing attitudes, providing encouragement and support, we will make things happen."

Can we be certain engagement programmes make a difference commercially? Hay Group research suggests engaged employees generate 43% more revenue and can boost performance by up to 200%. But not everyone is convinced we are pursuing it in the right way.

Tim Casserley, founder of consultancy Edge Equilibrium, thinks often employers believe they can give employees a collective purpose, without considering what an individual's personal purpose is or could be. "Companies trying to improve engagement are expecting everyone to salute the flag, but what are people's personal values? What is important? Engagement is doomed, unless the personal part of the equation is brought in.

"I don't see the benefit of people complying because they're told to - unthinkingly following a set of values that mean little to them," says Casserley. He believes engagement can add meaning to working lives if individuals are given the chance to explore their own values, and this can be done through training line managers to work with their teams. "You have got to build some humanity into it," he urges.

And engagement has to prove its worth beyond the HR arena, as a business driver. So more companies are looking for a robust measure relevant to their business, says Nick Tatchell, a director at Towers Watson. "We do linkage work, which builds the case for engagement from internal data. Due to this more scientific approach, we have seen more CEOs and CFOs accepting that engagement programmes are a worthwhile investment." Finding evidence improved engagement is affecting sales or customer service levels is difficult. "You might have achieved great engagement, but are selling a crap product, so the engagement achievement won't show up in the sales metric."

Tatchell believes off-the-shelf measures are not necessarily the way to progress. "You need to create your own means of measuring engagement. Rio Tinto has built safety into the engagement strategy and has found safety performance is better in areas with higher levels of engagement," he says. "In financial services, more attention needs to be taken around customer service, to re-build brand reputations."

Brady thinks engagement has become an accepted part of what HR does, but the next step will be to take it beyond the "basic hygiene factors" of making sure staff are recognised, inspired, well managed and given clear career opportunities. "All these are a matter of course. Engagement that drives organisation-specific performance is the next step," she says. Tatchell reiterates how deep-rooted a culture for engagement must be: "It shouldn't be seen as an 'initiative', but rather an all-encompassing cultural position. It needs to be part of 'the way we do things around here'."

HR is anxious to prove its worth beyond the 'fluffy' people-management issues, but Giles explains: "The engagement industry has taken on a life of its own; we are in danger of breeding a workforce of high maintenance namby-pambies to make life at work engaging." Brady disagrees, believing engagement to be paramount. "Today, CEOs get how important people are to an organisation," she says."What HR does have to do is articulate why what you are doing is good for the business. It is more effective to have a fully engaged workforce."

Virgin's annual business plan has six priorities and as Brady says: "The top priority is engaging our people"

The industry-led, Government-sponsored Employee Engagement Task Force was launched from 10 Downing Street in March 2011 and had its first official meeting in early June. Led by David MacLeod (pictured) and Nita Clarke, the task force will build on its 2009 report, Engaging for Success, commissioned by the last government to explore the business case for improving workforce engagement. The report concluded that extending employee engagement is not an issue for legislation, but requires cultural change within organisations and across government agencies and external stakeholders, such as Investors in People, the CIPD and the Chartered Management Institute. "More people need to 'get it' - and more people need to do it," said the report.

"There is no way UK organisations will compete in a global marketplace, unless we are harnessing the full potential of our people," says MacLeod. "The movement itself must be industry-led. In other words, it is up to employers to move this up their agenda."

He and Clarke believe the main task ahead is to raise the profile of engagement with leaders. "Key to this is extending understanding of the business case for engagement and ensuring the necessary advice and assistance is available," says MacLeod. "Through the Guru Group and Practitioner Groups, we hope to bring together interested parties to develop solutions to meet their specific needs. We will develop tools that are helpful to organisations, making advice and best practice recommendations available through a central website."

The website is being developed for launch in the autumn. MacLeod says the Task Force will operate for between 18 and 24 months, with the goal of encouraging adoption of employee engagement policies and practices. There will not be a definitive, recommended survey from the Task Force, "but we will be offering starting points and suggestions, really helping employers buy into the movement and get started on building high levels of engagement in their workplaces", says MacLeod.

British HR managers and directors wholeheartedly endorse the idea of better engaging employees, according to a survey of 656 HR professionals carried out last year by HR magazine with talent management consultancy Fairplace. However, the research revealed a chronic lack of executive commitment to putting theory into practice. Too many organisations are failing to chart employee engagement levels consistently over time, while too few are acknowledging, acting upon and exploiting the link between engagement and business performance.

Survey highlights

  • A massive 98.9% of the respondents feel employee engagement does have a direct impact on business success
  • Over a quarter (27.1%) of workplaces have no means of measuring employee engagement
  • 48.4% of respondents say their organisations do not correlate employee engagement to tangible elements of business performance
  • 47.7% of those questioned said there is no executive sponsorship of employee engagement initiatives in their organisations
  • In 54.1% of cases, line managers are not held accountable for their teams' engagement levels