Mining Technology and Operations Summit Perth, November 2013 Dr. Shane Hodgson Enterprise Transformation Consulting Centurion, South Africa

Engage to retain

Definitions of Employee Engagement

Psychological

“presence”

Elements of

organisational

citizenship and

of commitment

Passion for work Job involvement and

“flow”

Emotional and

Intellectual

commitment Discretionary effort

Employee Engagement in an organisation has been

variously defined as:

Consequences of Employee Engagement

These are generally agreed to be positive; for example

– The Gallup Organisation (2004) found critical links between employee

engagement, customer loyalty, business growth and profitability.

– Ott (2007) cites further Gallup research that found higher workplace engagement

predicts higher Earnings Per Share (EPS) in publicly-traded businesses.

– Rucci et al (1998) using data from Sears found a positive correlation between

employee engagement and enterprise-level financial performance.

– The Corporate Leadership Council found that profits grow up to three times

faster in organisations with engaged employees as compared with industry

competitors – and that “…engagement accounts for 40% of observed

performance improvements”

The Australian Experience of Employee Engagement

4

Latest research shows (Gallup, 2013) only 18 per cent of Australians can say

they love their work.

Almost two thirds consider themselves to be emotionally detached from their

employer, and as such they produce the bare minimum, which does not bode well for competitiveness.

One in five Australians has admitted to being actively disengaged, openly

disliking their workplace, performing poorly and taking unnecessary sick days.

Something that companies can’t always afford as, according to a study by the

University of Western Australia, absenteeism costs the private sector $2

billion in lost productivity a year, and $5 billion in the public sector.

“Yes, but…” Some Key Issues in Engagement Research

1. There are over 50 definitions of engagement – and we’re often not sure if we

are talking about “... an attitude, a behaviour, an outcome or all three”

(Guest, 2009)

2. Conducting engagement surveys is not managing engagement – you can’t

make a pig get fat by weighing it.

3. Correlation is not the same as causality – this is very important to remember

when considering links between engagement and organisational performance.

4. Measuring something will most likely change its nature (Heisenberg;

Observer-observed interaction; Hawthorn)

Defining our Terms – Choosing

a Definition

We can say that employees that are engaged will demonstrate:

1. A rational understanding of and support for their organisation’s goals

and values (“Think”)

2. An emotional attachment to and pride in their organisation (“Feel”)

3. The motivation / willingness to invest discretionary effort in their role to

meet the organisation’s goals (“Act”)

•(Towers Watson Global Workforce Study 2010)

Leap of Faith (Please jump off the bridge with me, we’ll build our wings on the

way down!)

•Meta-analysis of the literature on engagement gives rise to various

organisational management and governance practices that appear to positively

affect engagement levels.

•Looking at these through the lens of the Towers Watson definition of

engagement, I have separated out what I regard as the eight most important

practices and have then assigned these to the “Think”, “Feel” and “Act”

categories.

CAVEAT: This is not a comprehensive coverage, and there is some

overlap here and there between practices.

Top 8 Management Practices for High Engagement

A rational understanding of and support for their

organisation’s goals and values (“Think”)

•Clear Strategic Narrative

•Coherent and Congruent Corporate Values

•Conversation, not Communication

An emotional attachment to and pride in their organisation (“Feel”)

•Socially Responsible Management

•Inspirational and Trustworthy Leadership

• Dynamic Employer Brand

The motivation / willingness to invest discretionary effort in their role to meet the

organisation’s goals (“Act”)

•Robust Approach to Managing Change

•An Intentional Culture of Organisational Fairness

Clear Strategic Narrative

Leaders need to provide a clear strategic narrative that expresses the purpose

of the organisation, why it has the particular vision that it has, and how an

employee can contribute to the purpose (MacLeod Review of Employee

Engagement, 2009)

A strategic narrative is about more than facts and numbers; it can contain

stories and anecdotes. Employees can be involved in the initial creation of the narrative, and in customising it for their departments so that they have a clear

and personal link to the strategy.

Coherent and Congruent Corporate Values

When employees hold values that match the values of their employer, they have

higher job satisfaction, identify more closely with the organisation and seek to maintain employment relationships (various, in Edwards & Cable 2009)

Corporate values matter to employees (Wildermuth and Pauken, 2008), because when there is congruence between employee and corporate values,

employees experience feelings of Safety and Meaningfulness (which are

precursors to Engagement)

Conversation, not Communication

“Effective employee communication is a leading indicator of financial

performance and a driver of employee engagement – and companies that are

highly effective communicators had a whopping 47 per cent higher total return to

shareholders over the last five years, compared with firms that are the least

effective communicators” (Towers Watson 2009/2010 Communication ROI

Study)

Conversation, not Communication

Communication must be a dialogue, a two-way conversation, and must follow

some basic rules (Edelman Change, 2010)

1. Strategy is not inert and is not a holy mantra – employees must believe they

can still have input

2. The CEO must talk idea, insight and vision, not process, and Managers must

not act as parrots, but should educate, involve and listen.

3. Communications is not a set of tactics, but a living dialogue

4. Employees are not a captive audience, and we need to compete for their

attention.

Socially Responsible Management - CSR and Sustainability

In a survey commissioned by National Geographic magazine in February 2008,

more than 80% of U.S. workers polled said they believe it is important to work

for a company or organisation that makes the environment a top priority.

Latest research from the Kenexa Institute suggests that “...an organisation’s

business choices that support the environment such as recycling, energy

conservation and vendor selection have a significant influence on employees’ engagement levels”

Transformational Leadership

Transformational leaders inspire followers to adhere to a common vision. As a

contrast, transactional leaders focus on the employees’ immediate interests and

individual rewards (Bass, 1999).

Densten (2005) found that a leader’s inspirational motivation reduces employee

exhaustion and depersonalization. and, when clearly and compellingly

transmitted, gives followers reasons to reach goals.

Transformational Leadership

Research by the UK’s Business Enterprise group (BERR) shows that

transformational leaders show:

•Genuine shared vision

•Real confidence and trust in their teams

•Respect for employees and customers

•Commitment to developing people

•Clear standards of ethics and integrity

•Willingness to take risks

Dynamic Employer Brand

The Chartered Institute of Personnel and Development (CIPD) in the UK suggests

the following definition of an employer brand: ‘...a set of attributes and qualities –

often intangible - that makes an organisation distinctive, promises a particular kind

of employment experience, and appeals to those people who will thrive and perform

best in its culture’.

Employer branding policies of the top 100 US companies were associated with not only stable and highly positive workforce attitudes but also performance

advantages over the broad market, and in some cases, over the matched group,

with beneficial effects on organisational performance (Fulmer et al, 2003)

CAVEAT : People join brands and leave managers...

Robust Approach to Managing Change

The way we go about managing major business change gives an unmistakeable

message to our employees. We reveal our clarity of purpose (or lack thereof),

how much we respect and value our staff, how serious we are about the change

and more.

Projects seldom fail because software or hardware fails – projects fail because

we consistently underestimate the amount of effort we should put into anticipating, managing and measuring the change impact on our organisations.

When we make this mistake, we reveal a lack of understanding of, and feeling

for, our employees.

Organisational Fairness

Fairness is considered to be one of the necessary conditions leading to trust

(Beugré,1998), which is essential for employee engagement. Equity, and in

essence - fairness, is a key driver of employee engagement (Kontakos,

2007). Fairness is composed of:

1. Distributive Justice – the distribution of outcomes is fair

2. Procedural Justice – the procedure used to determine the distribution

of outcomes is fair

3. Interpersonal Justice - Treatment with politeness, dignity, and respect

by those who execute procedures or determine outcomes

4. Informational Justice - The explanations of why procedures were

used in a certain way or outcomes were distributed in a certain fashion

Why Are We Complacent?

When data suggest that “… most managers are more likely to

douse the flames of employee enthusiasm than fan them, and

are more likely to frustrate extraordinary accomplishment than

to foster it?” Gary Hamel, writing in a recent Wall Street

Journal blog post

(for a more detailed version of this presentation with references, please contact shane.hodgson@outlook.com )