There is not much agreement on

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1 Management & Careers Harnessing the Power of Employee Engagement, Part 1 By Bob Lavigna There is a strong research-based business case for improving employee engagement. Simply put, organizations that have engaged employees perform better than organizations whose employees are not engaged. There is not much agreement on exactly what employee engagement is, or how to make it happen. LinkedIn, the social networking site, hosts online discussion groups (among other functions), provides a good example. One discussion group focuses on employee engagement, and a recent discussion question was, In ten words or less, name what you believe are or could be the three most effective drivers of engagement. When this article was written, 124 LinkedIn members had posted a wide range of answers, including: creating conversations where none existed, work gratification, purpose, compelling vision, camaraderie, personal connection, inclusion, feedback, caring, and cash. The range of responses is interesting and instructive, but it doesn t give managers much help on how to engage their employees. For that, we need to look at the science of engagement what it is, why it s important, how it applies to government in particular, and how to maximize it. Employee engagement is defined as a heightened connection to work, the organization, the mission, or co-workers. It s not necessarily about happy employees, although it would be nice if employees were happy, at least most of the time. Engaged employees find personal meaning and pride in their work. They believe that their organizations value them. In return, engaged employees are more likely to go above the minimum and expend discretionary effort to deliver performance. Another way to put it is that engaged employees plan to stay for what they give; the disengaged stay for what they get. 1 Engaged employees: n Go the extra mile for customers. n Work hard and smart. n Aren t thinking about leaving. n Volunteer their best ideas. n Drive innovation to move the organization forward. n Call in sick only when they really are. WHY DOES ENGAGEMENT MATTER? This may seem like a silly question isn t it just common sense that managers should want their employees to be highly engaged? Maybe, but common sense isn t always common practice. Engagement matters because there is a strong research-based business case for improving employee engagement. Simply put, organizations that have engaged employees perform better than organizations whose employees are not engaged. For example, a public opinion polling firm conducted extensive research on engagement. The firm s results demonstrate that high-engagement organizations outperform low-engagement organizations in seven critical areas profitability, productivity, customer satisfaction, retention, absenteeism, safety, 52 Government Finance Review December 2011

2 and lost or stolen inventory. 2 According to this research, high-engagement organizations are almost 20 percent more productive than their low-engagement counterparts. The polling firm defines engaged employees as those who work with passion and feel a profound connection to their organization, who drive innovation and move the organization forward. Not engaged employees are essentially checked out, sleepwalking through their workday and putting time, but not energy or passion, into their work. Actively disengaged employees aren t just unhappy at work; they re busy acting out their unhappiness and undermining what their engaged coworkers accomplish. 3 Another study, of 50 global companies, also found that the firms with high levels of employee engagement produced dramatically better results than companies with low levels of engagement. In three key metrics income, income growth, and earnings per share the high-engagement organizations performed dramatically better, by up to 43 percent. 4 Most employees, however, are not very engaged. For example: n The polling firm s engagement survey data, reflecting the views of millions of (mostly private-sector) employees, show that only 29 percent of employees are engaged, while 54 percent are not engaged and 17 percent are actively disengaged. 5 n A consulting firm surveyed more than 17,000 public and non-profit sector employees and found that only 16 percent of employees are highly engaged, with 65 percent moderately engaged and 19 percent disengaged. 6 n Survey data from by the U.S. Merit Systems Protection Board indicated that 35.3 percent of federal employees are engaged, 47.2 percent are somewhat engaged, and 17.5 percent are not engaged. 7 One particularly powerful aspect of employee engagement is that individual managers and supervisors can move the needle of engagement without elaborate systems or processes, or even much involvement by their human resources departments. Improving employee engagement often comes down to creating a stronger supervisoremployee relationship. THE SPECIAL CASE OF GOVERNMENT Governments don t usually rely on measures such as income and profit, like the private sector (although improved productivity, customer satisfaction, and retention are certainly important in the public sector). The public sector is of course fundamentally different from the private sector in some other ways, too: n Most government agencies are led by political leaders who are often in office for a short time, and whose policy goals and agendas are politically driven. That s not necessarily bad, but it does create a short-term focus. n A government s assets are almost exclusively its people. Unlike many private-sector firms, the public sector doesn t have raw materials, machinery, or patents to base its business on. n Similarly, government has very limited ways of responding to tough economic times. In contrast to private sector companies, most jurisdictions can t survive in a weak economy by selling more or different products, or cutting costs by selling off business units. n Due to laws that require open records and meetings, the activities of government are highly visible and highly scrutinized. When a government agency makes a big mistake, it s much more likely to be publicized in the media than when a private-sector firm slips up. n Despite the erosion of public sector unions, government remains by far the most heavily unionized sector of the economy. n Public-sector employees benefit from much stronger job protections (such as lengthy grievance procedures and firing only for cause) than private-sector employees. n Despite attacks on public-sector benefits, most government employees still have better benefits (like pensions, amount of paid time off, and health care that is heavily employer-subsidized) than many private-sector firms. These golden handcuffs tend to limit employee turnover, and while low turnover can be healthy, it can also lead to some calcification of the workforce. n Despite calls for more efficiency in government ( run it like a business ), the public sector was not really built for efficiency. Instead, government was designed for consensus and compromise, which take time and are not always efficient. That s why so many private-sector executives who enter government become frustrated. December 2011 Government Finance Review 53

3 n There is some evidence that public servants have different motivations than private-sector workers. This public service ethic research has found that many government employees are primarily attracted by the opportunity to make a difference in the lives of the people they serve. All this means that government managers need to approach engagement differently than private-sector employers and managers. For example, a 2011 survey by the Center for State and Local Government Excellence revealed that the main issue facing state and local governments is morale. 8 That translates into employee engagement. Compare that result to a survey of the top business challenges private-sector executives say they face: excellence in execution, consistent execution of strategy by top management, and sustained and steady top-line growth. 9 MEASURING ENGAGEMENT Keen interest in employee engagement has created a sort of engagement cottage industry. A Google search on employee engagement produces more than 5 million hits, including a very authoritative-sounding Wikipedia entry. The Google searcher is also bombarded with engagement tools, reports, white papers, training sessions, lists, award programs, seminars, blogs, networks, and so on. It s an employee engagement jungle out there. Unfortunately, some of these engagement solutions are unsupported by any apparent science, and most are geared toward the private sector. But there are approaches to building employee engagement that are based on strong scientific evidence. For example, one firm s work is based on 30 years of research involving more than 17 million employees. 10 These results, which have been reported in publications such as the Harvard Business Review; have isolated 12 core survey questions that predict employee engagement and, therefore, workgroup performance: 11 n I know what is expected of me at work. n I have the materials and equipment I need to do my work right. n At work, I have the opportunity to do what I do best every day. n In the last seven days, I have received recognition or praise for doing good work. n My supervisor, or someone at work, seems to care about me as a person. n There is someone at work who encourages my development. n At work, my opinions seem to count. n The mission or purpose of my organization makes me feel my job is important. n My associates or fellow employees are committed to doing quality work. n I have a best friend at work. n In the last six months, someone at work has talked to me about my progress. n This last year, I have had opportunities at work to learn and grow. And although this research is based on the private sector, there are measurement tools that focus on the public sector. For example: n The U.S. Merit Systems Protection Board (MSPB) developed an engagement survey it has used with than 40,000 federal government employees. The results generalize to the 2.1 million employee federal workforce, the nation s largest, and can also be applied to other levels of government. 12 n The United Kingdom civil service has its own people survey, a comprehensive survey of UK government employees. 13 n A consulting firm surveyed more than 17,000 government and nonprofit employees and used the results to identify factors that drive employee engagement. 14 n The U.S. Office of Personnel Management (OPM) conducts an annual employee viewpoint survey of hundreds of thousands of federal employees and uses the results to rank federal agencies on several workplace measures, including employee satisfaction, leadership, and talent management. 15 n The non-profit Partnership for Public Service uses the OPM data to annually rate and rank more than 240 federal agencies in its Best Places to Work in the Federal Government listing. 16 Although employee satisfaction (what the Partnership measures) is not the same as engagement, other research has shown that both satisfaction and engagement are linked to organizational performance. 17 There is a wide range of engagement survey approaches, but they share a few key factors. Although engagement is described differently in different surveys and analyses, it boils down to: n Opportunity to perform well at work. n Personal and professional growth. n Satisfaction with the recognition received. 54 Government Finance Review December 2011

4 n Pride in the work and the organization. n Satisfaction with supervision and leadership. n The link between the employee s work and the organization s mission. n Input to decision making in other words, employees opinions count. HOW TO ASSESS ENGAGEMENT Engagement can be assessed either indirectly or directly. Indirect assessment involves using data like employee performance, turnover, missed time, accidents, etc., to measure engagement. It isn t a big leap of faith to conclude that an agency with a lot of poor performers, high turnover, or excessive employee sick time may have some engagement issues. We ve already established that high engagement results in lower turnover, less missed time, better performance, and so on, so the case is closed, right? Well, not exactly. Take high turnover. It could be that low employee engagement is driving high turnover, but it could also be that an organization with high turnover doesn t pay its employees enough to keep them, or has a poor selection process that results in bad job fits, or has a lot of baby boomers who are retiring because it s time for them to move on to the next stages of their lives. On top of that, the public sector doesn t have a great record of providing employees with candid performance appraisals or, in some cases, providing employees with appraisals at all. Therefore, employee performance data are often not good indicators of much of anything. That s why direct measurement, through surveys, is the more valid and MSPB Employee Engagement Scale Questions Pride in one s work or workplace. 1. My agency is successful at accomplishing its mission. 2. My work unit produces high-quality products and services. 3. The work I do is meaningful to me. 4. I would recommend my agency as a place to work. Satisfaction with leadership. 5. Overall, I am satisfied with my supervisor. 6. Overall, I am satisfied with managers above my immediate supervisor. Opportunity to perform well at work. 7. I know what is expected of me on the job. 8. My job makes good use of my skills and abilities. 9. I have the resources to do my job well. 10. I have sufficient opportunities (such as challenging assignments or projects) to earn a high performance rating. Satisfaction with the recognition received. 11. Recognition and rewards are based on performance in my work unit. 12. I am satisfied with the recognition and rewards I receive for my work. Prospect for future personal and professional growth. 13. I am given a real opportunity to improve my skills in my organization. Positive work environment with some focus on teamwork. 14. I am treated with respect at work. 15. My opinions count at work. 16. A spirit of cooperation and teamwork exists in my work unit. reliable way to assess engagement. It is more involved than simply looking at already-existing data, but it s worth the time and effort to accurately measure engagement. Most of these surveys you ll find online are designed for employees in the for-profit world. Except for turnover, the metrics they use increased revenue and market share, higher stock prices are not especially relevant to most government agencies. Plus, when it s time to use the survey data to develop and put in place a change strategy, succeeding in the world of government is far different than succeeding in the corporate world. Start with a survey that s been validated, or statistically proven to measure what it s supposed to be measuring, in the public sector. Among other things, this usually means that the survey has been administered to a large sample of employees. The MSPB survey, for instance, has used statistical analysis to validate that the responses to its 16 engagement questions will reveal the extent that a work unit s employees are engaged. And although the results are based on surveys of federal gov- December 2011 Government Finance Review 55

5 ernment employees, the methodology can be applied to other public-sector workplaces. CONDUCTING SURVEYS While engagement surveys are the most direct way to assess engagement, surveying has its advantages and disadvantages, and therefore must be approached carefully. A big advantage is that surveys quantify the level of employee engagement, and these results can be the benchmark to assess engagement over time. Good surveys also deliver results that are clear and can be acted on. For example, if the results show that employees aren t receiving feedback regularly, or aren t sure exactly what they re supposed to be doing, managers can act to fix these problems. A poorly done survey, however, can create more problems than it solves. Following are some issues to consider: n The agency must communicate clearly about why the survey is being conducted, how it will be administered, and how the results will be used. Without a strong communication strategy, confusion (and rumor and speculation) can reign. n Poorly designed questions can provide data that are not useful. n Employees must believe their responses will be anonymous; otherwise, they won t be candid. n Results should be communicated promptly and completely. n Surveys will almost always reveal problems, so management has to be prepared for that and committed to responding. The view from the top can be different than the view from the bottom, but survey data mean that management cannot plead ignorance about the problems employees identify. These employees who invest time and effort to complete a survey expect management to act on the results, and failure to do so will lead to cynicism and jeopardize future attempts to obtain employee feedback. CONCLUSIONS The main resource government agencies have for achieving their missions is talent; a jurisdiction s employees are its chief assets. It only makes sense, then, to think about how engaged those employees might be. Government differs from the public sector in its goals and, therefore, how it measures engagement, so the first step is determining how to assess public-sector employee engagement. The next logical question is how, then, an organization should conduct a survey, what questions it should ask, and how it should act on the information it learns. These questions will be answered in the next installment of this article, which will be published in the February 2012 issue of Government Finance Review. y Notes 1. BlesssingWhite Research, Employee Engagement Report 2011: Beyond the numbers A practical approach for individuals, managers and executives, Gallup Consulting, Employee Engagement, What s Your Engagement Ratio, Steve Crabtree, Getting Personal in the Workplace: Are negative relationships squelching productivity in your company? The Gallup Management Journal, htm, TowersPerrin Consulting, Employee Engagement Underpins Business Transformation, N. Kelly, Employee engagement is down, spiritoftrust/?p=441, Towers Perrin Global Public Sector, Engaging the Employee: What 17,000+ Public Sector Employees Say about the Work Experience, presentation at the 2006 International Public Management Association for Human Resources Southern Region Conference. 7. U.S. Merit Systems Protection Board, The Power of Federal Employee Engagement, Center for State and Local Government Excellence, Survey Findings State and Local Government Workforce: 2011 Realities, The Conference Board, CEO Challenge 2010: Top 10 Challenges, CEOChallenges_2010.pdf, Gallup Consulting, Employee Engagement A Leading Indicator of Financial Performance, J. Harter, F. Schmidt, E. Killham, and J. Asplund, Q12 Meta-analysis, U.S. Merit Systems Protection Board, The Power of Federal Employee Engagement, United Kingdom Cabinet Office, Civil Service People Survey 2010: Initial findings, Towers Perrin Global Public Sector, Engaging the Employee. 15. U.S. Office of Personnel Management, Federal Employee Viewpoint Survey, Partnership for Public Service, Best Places to Work in the Federal Government, bestplacestowork.org/bptw/rankings, J. Harter, F., Schmidt, L., Killham, Employee engagement, satisfaction, and business-unitlevel outcomes: A meta-analysis, The Gallup Organization, BOB LAVIGNA is assistant vice chancellor and director of human resources at the University of Wisconsin-Madison. Lavigna has been vice president of research at the Partnership for Public Service; director, Consulting Services East for CPS Human Resource Services; director, State of Wisconsin Civil Service System; and assistant to the assistant comptroller general at the U.S. Government Accountability Office, among other positions. He has a BA in public affairs from George Washington University and a Master s degree in personnel/human resources management from Cornell University. 56 Government Finance Review December 2011