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Posted by Jeffrey Henning on Mon, Oct 26, 2009
 In "A Historical Perspective of Employee Engagement: An Emerging Definition", Michael Bradley Shuck and Karen K. Wollard study the evolution of the term employee engagement and synthesize a possible consensus definition. Why is employee engagement an important concept? Shuck and Wollard write:
Employee engagement has generated a great deal of interest in recent years as a widely used term in organizations and consulting firms (Macey & Schneider, 2008) especially as credible evidence points toward an engagement-profit linkage (Czarnowsky, 2008). Employee engagement has been characterized as "a distinct and unique construct that consists of cognitive, emotional, and behavioral components . . . associated with individual role performance" (Saks, 2005, p. 602). Engaged employees often display a deep, positive emotional connection with their work and are likely to display attentiveness and mental absorption in their work (Saks, 2006). Although engaged employees are consistently more productive, profitable, safer, healthier, and less likely to leave their employer (Fleming & Asplund, 2007; Wagner & Harter, 2006), only 30% of the global workforce is estimated to be engaged (Harter, Schmidt, & Hayes, 2002; Saks, 2006). Nonetheless, despite continued evidence of linkages to positive business outcomes, employee engagement is declining (Czarnowsky, 2008).
The first published use of the term employee engagement was in the Academy of Management Journal article "Psychological Conditions of Personal Engagement and Disengagement at Work" (W. Kahn, 1990), but since then many varied and conflicting definitions of employee engagement have made it difficult to compare and contrast research findings. To determine a common definition, Shuck and Wollard reviewed 140 articles that mentioned employee engagement and observed four areas of consistency or inconsistency:
- Engagement is a personal decision, not an organizational decision as implied by some definitions.
- While early definitions treated engagement as an atomic concept, later definitions divided it into three basic concepts: emotional, behavioral and cognitive engagement.
- Employee engagement has "no physical properties, but is manifested and often measured behaviorally". Different definitions look at behavior as the employee's basic job performance or extended effort or the success of the employer.
- Employee engagement is about the behaviors that meet or exceed organizational goals.
Synthesizing the reviewed definitions, Shuck and Wollard define employee engagement as "an emergent and working condition as a positive cognitive, emotional, and behavioral state directed toward organizational outcomes".
Given the growing importance of linking employee engagement to customer loyalty and business profits, standardizing on a common definition for the term provides an important foundation for future research.
Posted by Brian Koma on Fri, Aug 21, 2009
According to the CE IQ study, organizations with the most loyal customers not only measure and monitor employee interactions with customers but then share that feedback with employees (a strong correlation of 0.54 to the study’s loyalty index). This creates a closed feedback loop that allows customer-facing staff members to understand the impact of their interactions on customers and enables the creation of programs that allow employees to improve those interactions over time.  In addition, companies with the most loyal customers also periodically share VOC ( Voice of the Customer) information with employees across the organization, ensuring widespread understanding of the customer’s point of view. Taken a step further, these organizations also engage customers in two-way dialogues through online communities. As Jeffrey wrote in The Top Ten Reasons for Building an Online Community in 2009, “This allows a wide variety of individuals within the business to interact and engage with customers. Dell has 40 employees participate in a team called Communities & Conversations. CEOs always talk about making their organizations ‘customer centric’: by talking to customers and evangelizing their viewpoints across the company, as these Dell team members do, the organization truly becomes centered on the customer.”
Finally, organizations with the most loyal customers also recognize the link between satisfied employees and loyal customers by measuring employee satisfaction on a regular basis. Satisfied and loyal employees reflect their positive attitudes and good behaviors to customers, who in turn increase their loyalty to the business. Averaging these four best practices together, the resulting index has a 0.65 correlation to customer loyalty, highest of any of the six practice areas examined. Clearly, employee-customer engagement is a key to unlocking greater customer loyalty.
Posted by Jeffrey Henning on Fri, Aug 14, 2009
 Sixteen years ago today my only freelance customer and I decided that we should found a company to sell the CAPI software application that I had developed for him. Looking up into the sky, where the annual meteor shower was underway, Rich suggested we name the company Perseides Software. A day or two later, after both of us independently realized that no one we bounced the name off of knew how to spell Perseides, I suggested we call it Perseus instead, after the constellation in which the meteor showers appear. As Boston-based entrepreneurs, we loved Lotus Development Corp., and Rich suggested we name the company Perseus Development Corp. Despite its astronomical eponym, Perseus did not have stellar growth initially. Rich and I had made the classic mistake of thinking there was a large market for a product that we needed. In 1996, we extended the product (called Perseus IntelliWriter) to support web surveys, and then in 1997 we launched one of the first two applications dedicated to web surveys, Perseus SurveySolutions for the Web. We grew dramatically from then on, making the Inc. 500 list twice and the Deloitte & Touche New England Fast 50 list four times. Since Perseus grew at a time of record low unemployment, we often had difficulty hiring qualified staff. Some staff didn’t work out, as they would have done better in a large, stable business with more formal processes than we had. One of our clients automated an applicant assessment process to identify which types of jobs their applicants were most suited for, and that inspired me to come up with the Perseus core values. I agonized over every firing that I had done over the years, and I thought about each of them to come up with the following. These are the values that have enabled us to build the leading company in our industry; these are the values that will fuel our worldwide growth in the coming years; and these are the values that will drive your career here:
- Professionalism – Demonstrating professional methods, character and standards. Treating prospects, clients and co-workers generously and charitably at all times, but especially in the face of adversity.
- Enthusiasm – Showing excitement, optimism and passion for your work.
- Resourcefulness – Acting effectively and imaginatively to produce great results from scarce resources.
- Self-directedness – Working independently and autonomously to achieve the goals set by management.
- Ethics – Acting in accordance with the accepted principles of right and wrong that govern the conduct of our profession.
- Unselfishness – Putting others before yourself, giving your time and effort for prospects, clients and co-workers. Showing cooperative effort as the member of a group to achieve a common goal.
- Strategic-mindedness – Suggesting and implementing long-term improvements springing from a sequence of short-term tasks.
OK, I probably worked too hard to have the core values spell Perseus! But it certainly made it easier for me to remember them when interviewing applicants. Too often employee satisfaction research overlooks the fact that to have truly satisfied employees you must hire the right types of people in the first place. The Perseus core values became a way for us to do this with much greater consistently. As you think about employee loyalty for your organization, consider profiling respondents by assessment questions, where they indicate where they fall on a continuum for each value (e.g., for self-directedness, from a continuum of "prefers close direction" to "prefers independence"). My partner and I sold our company to Austin Ventures in 2006, and AV purchased WebSurveyor and merged it with Perseus to form Vovici. (For the record, Vovici is neither a constellation nor a meteor shower!) While the Perseus name may no longer live on in the market, as a mnemonic for our coworker values it lives on each time I interview a new applicant for Vovici.
Posted by Jeffrey Henning on Wed, Aug 12, 2009
 Besides the Employee NPS and the Gallup Q12, another employee-satisfaction benchmark is Walker Loyalty. Walker Information, a Vovici partner, fields its own benchmark consisting of 80 questions across eight sections: - Attitudes toward the Organization
- Work-Related Behaviors
- Questions about the Organization and Your Work
- More Information about Work Factors
- Other General Opinions about the Organization
- Rating the Influence of Work Factors
- Opinions about the Integrity of the Organization
- Any Comments in Your Own Words?
The results of key questions are used to segment employees by attitude and behavior: - Truly Loyal – positive attitude, positive behavior – These employees plan to remain employed and want to work for your organization.
- Accessible – positive attitude, negative behavior – Accessible employees want to remain employed but may not be able to, because of outside circumstances or better opportunities elsewhere.
- Trapped – negative attitude, positive behavior – Trapped employees plan to remain employed, but would prefer to work elsewhere.
- High Risk – negative attitude, negative behavior – High Risk employees do not plan to remain employed and no longer want to be employed by your organization.
In 2007, Walker reported that 34% of U.S. employees were Truly Loyal, 7% were Accessible, 23% were Trapped and 36% were High Risk. Besides its segmentation of employees by attitude and behavior, Walker Loyalty also segments attributes into strengths and areas for improvement: Top Priorities (high performance gap, high influence on employee engagement), Lesser Priorities (high performance gap, low influence on engagement), Leverageable Strengths (low gap, high influence) and Other Strengths (low gap, low influence). This quadrant analysis makes it easy for organizations to determine what attributes they should focus on to improve employee engagement. The following criticisms can be made about the Walker Information employee benchmark: - While the attitudinal index used in the segmentation is derived from three questions, giving it greater accuracy and stability, the behavioral measure is based on the answer to one question.
- The survey is only used for benchmarking U.S. organizations.
- Little research has been done outside Walker to independently attest to the predictive validity of its loyalty segmentation.
See also:
Posted by Jeffrey Henning on Tue, Jul 07, 2009
The Net Promoter Score (NPS) has jumped from use as a customer retention measure to use as an employee retention model. Despite criticisms of NPS, it remains popular because it is well marketed, easy to understand and its model makes intuitive sense: every organization wants more promoters than detractors. As a result of this popularity, NPS has crossed over to employee loyalty research, where it is known as ENPS, the Employee Net Promoter Score. 
Symantec, Atlas Copco, Holcim and Celanese are international brands that have adopted ENPS. Holcim Ltd., a global provider of building materials, uses ENPS worldwide to measure the loyalty of its 90,000 staff, but doesn’t benchmark staff in different countries against one another, finding that cultural differences contribute to dramatic measurement differences, according to Christian Birck, a senior vice president of Holcim. Celanese, a chemical producer, was an early adopter of ENPS, embracing it in September of 2007. Alan Maxwell, Vice President of Corporate Human Resources, said, “From a Six Sigma perspective, there was a need to baseline current state and track progress as the model/programs were implemented. ENPS hit the mark for us.” Since quarterly tracking began, Celanese has seen its ENPS steadily increase, from -8% to -3% to 7% to 24%. Further, KPIs have also improved, with turnover dropping by half, for example. ENPS offers a model that makes intuitive sense, but—while Fred Reichheld contends that NPS correlates to company growth for eight industries—no such correlation has yet been demonstrated for employee loyalty. Further, employees can be willing to recommend you and yet still disloyal, as shown by this Walker analysis of the true cost of low employee loyalty. Of course, if your primary concern is around recruiting, ENPS can be a good choice. ENPS is simple to implement and is good for organizations looking to “do it themselves”, whereas Gallup Q12 and Walker Loyalty are copyrighted instruments of their respective organizations, and can only be implemented by those firms or their partners. ENPS does not provide much in the way of actionable information that organizations can use to improve. Gallup and Q12 offer an extensive program of organizational-effectiveness consulting that can be used to drive greater results. Walker—a Vovici partner—provides a detailed battery of items to evaluate, and includes a detailed and segmented prioritization of attributes that affect employee engagement. With only 4.3% of North American organizations surveyed by Vovici using employee-satisfaction benchmarking, your organization should look at the opportunities offered by such benchmarks.
Posted by Jeffrey Henning on Tue, Jun 16, 2009
 Gallup developed its Q12 benchmark specifically to correlate its measure of employee engagement to worker productivity, customer loyalty and sales growth (see this Walker Information correlation between employee satisfaction and customer satisfaction). Gallup consultants sifted through hundreds of questions in hundreds of surveys before choosing the twelve questions with the highest correlations to external measures. Topics covered include workplace expectations, supervisory relations, even working with a best friend. Each of the 12 questions is rated on a five-point scale and is one of the following four categories: - Basic Needs – two questions
- Management Support – four questions
- Teamwork – four questions
- Growth – two questions
The ratings from all twelve of these questions are then combined into an index, which can be used to segment employees into three categories: - Engaged employees work with passion. Because they feel a strong connection to the organization, they work hard to innovate and improve.
- Not-Engaged employees do the work expected of them, but do not put in extra effort.
- Actively Disengaged employees aren’t just unhappy, but are spreading their unhappiness to other staff.
Nationally, in 2005, engaged employees made up 28% of the work force globally, not-engaged employees made up 54%, and actively disengaged made up 17%. Contrast this with the Walker employee loyalty model. The Q12 database, with 5.4 million responses, is by far the largest employee benchmark available. Gallup clients can benchmark their organizations employee-engagement levels against research across 620,000 workgroups, 504 organizations, 16 major industries and 137 countries. Gallup backs up its benchmarking with a full human-resource consulting program to help your organization use the results to improve your organization’s employee-engagement levels. Best Buy, International Paper, Swissôtel and B&Q are some of the notable subscribers to the Q12 benchmark. Gallup is for the most part a well accepted benchmark. Some constructive criticisms: - It is unlikely that these twelve questions have equal value to every organization. For instance, one large government organization found that only five of the 12 questions differentiated the best workgroups (the top 10%) from the bottom 90%; other questions might have been more appropriate for them to examine.
- Not all measures are actionable: for instance, the measure relating to having a best friend at work is not actionable, as there is little an organization can do to provide a best friend (buy every employee a company-owned dog?!).
- Little research has been done outside Gallup to independently attest to the predictive validity of the measures used.
A regular employee-pulse survey such as the Q12 is an important part of an overall employee satisfaction program and, for large organizations, should be fielded to a random sample of employees on a monthly or quarterly basis. Such surveys should be complemented with in-depth employee satisfaction research, offering every employee the chance to respond on a rotating basis at least once during the year.
Posted by Jeffrey Henning on Fri, Apr 24, 2009
 Most discussions of online communities for feedback involve communities of customers and prospects. Just as important are online communities of employees. Such closed, private communities can offer employers rich insights about workplace conditions and changes in markets the employer serves.
One Vovici client, an international bank, has been experiencing tremendous growth in an emerging market, taking advantage of financially weakened competitors. As a result of this growth, the bank is facing a number of new challenges, chief of which are increased competition for local sales talent and increased competition for customers. The organization implemented an employee community to help address both of these issues. Employee feedback gathered from the online community is used to help position the bank as the "employer of choice" in this region's financial market. The community is also used to provide a unique window on customers: employees share customer feedback from the field and submit product and service ideas of their own and those suggested by customers.
Another user of Vovici Community Builder has created an employee community that goes far beyond feedback. While employee satisfaction research is fielded through the online community, employees typically log in for other reasons:
- To view weekly sales numbers
- To participate in discussion forums
- To submit questions to senior management
- To view status reports for each department
- To see company news
- To access other employee portals, such as the benefits portal
What innovative uses of online employee communities have you seen?
Posted by Jeffrey Henning on Fri, Apr 10, 2009
See this write-up of the presentation.
Posted by Jeffrey Henning on Mon, Mar 02, 2009
 Here are some common mistakes to avoid when creating employee-satisfaction surveys. Some workplace environments are filled with negativity and paranoia-especially in this economy. Accordingly, you have to be extra sensitive to employee fears.
- Asking detailed demographic information. Respondents realize that you can triangulate answers to different questions to identify them. How many employees are male, over 40, with 15 years of service, in Houston? Ask only a few key demographic questions.
- Assigning unique URLs to every respondent. Most employee-satisfaction surveys promise confidentiality, yet survey invitations go out with different hyperlinks for different email addresses. In a poor working environment, recipients will compare URLs. While an open-participation link enables ballot-box stuffing, that risk is worth it if employees don't trust the survey system's safeguards to confidentiality.
- Trying to cover all aspects of being an employee in one survey. Be focused: are you exploring benefits or ways to improve how the customer is being served? Narrow and deep is often better than wide and shallow.
- Asking employees about things you cannot fix. Do you really want to ask if they get enough vacation time? Or if they want 401K matching?
- Failing to get enough completed responses to have representative results. Since early respondents in employee-satisfaction surveys tend to be on the extremes (very satisfied or very dissatisfied), broad participation is crucial if your data is to be representative. Make sure you get enough completes for your recommended sample size.
- Not sharing the results. The more negative the results, the more important to share them. Of course, when sharing the results, make sure to communicate what your management team has identified as the top priorities for improving employee loyalty.
What common mistakes have you seen in employee-satisfaction research?
Posted by Jeffrey Henning on Thu, Feb 05, 2009
After you've conducted that employee loyalty study (see Five Reasons You Must Measure Employee Loyalty during a Recession), you need to prioritize the areas where improving your organization's corporate climate will increase employee engagement. Besides segmenting employees by attitude and behavior, Walker Loyalty studies also segment attributes into strengths and areas for improvement:
- Top Priorities - high performance gap, high influence on employee engagement
- Lesser Priorities - high performance gap, low influence on engagement
- Leverageable Strengths - low gap, high influence
- Other Strengths - low gap, low influence
This quadrant analysis makes it easy for organizations to determine what areas they should focus on to improve employee loyalty:
To implement improvements inspired by the feedback, a Walker consultant will walk our clients through developing an action plan to address these priorities.
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