How to Measure Culture and Engagement

Transcription

1 How to Measure Culture and Engagement A Framework for Understanding Data, Methodologies, and Software Providers in the Culture and Engagement Space Author: Catherine Spence, co-founder and head of product at Pomello

2 KEY TAKEAWAYS Culture and engagement are related, but different: Employee engagement is how employees FEEL, whereas culture is what employees BELIEVE and how they ACT. One type of culture isn t necessarily better or worse than another. Different cultures attract certain people, and repel others. In that way, your culturedna plays a large role in determining who gets hired, who is promoted, and who departs from your organization. Because beliefs and behaviors are slow to change, culture is typically more consistent over time, whereas engagement can fluctuate frequently from month to month or even week to week. The stronger the culture, the higher the employee engagement. A blow to engagement on a team with a strong culture will rebound over time but low engagement accompanied by a trend toward lower culture strength indicates that there s a breakdown in beliefs and behaviors. INTRODUCTION Company culture and employee engagement are critical in understanding how individuals relate to your organization. The good news is, there s a whole new body of data available to HR and business leaders, beyond traditional performance metrics, that captures a pulse on employees and reveals deeply-rooted perceptions about your organization. By analyzing this data, you ll gain deeper insight into the employee experience, as well as the strengths and opportunities of your workforce. THE PROBLEM? The market hasn t successfully educated HR leaders with a framework for understanding new data and tools that focus on culture and engagement. Many leaders don t fully understand what types of data are available, and how that data can be used. To further complicate things, the terms culture and engagement are often used interchangeably, when in fact, they are two distinct concepts. In this article, we ll untangle the oftenconfused concepts of culture and engagement, and provide that missing framework for understanding different types of data, methodologies, and survey and analytics providers, so you can be intentional about building a highly-engaged, culture-driven workforce. FIRST, UNDERSTAND THE DIFFERENCE ENGAGEMENT CULTURE Because employee engagement and company culture both involve an individual s relationship with their workplace, it s easy to see why they are often confused. That said, there is a clear distinction. Employee engagement is how employees FEEL, whereas culture is what employees BELIEVE and how they ACT. You might be wondering if one is more important than the other, or why this distinction even matters. Let s take a deeper dive to explore the differences, as well as the underlying relationship between these two concepts. 2

3 WHAT IS EMPLOYEE ENGAGEMENT? Employee engagement is the commitment the employee has to the organization and its goals. The term employee engagement was first coined in 1990 when Dr. William Kahn, professor of Organizational Behavior at Boston University, explored the conditions under which employees engage physically, cognitively, and emotionally with their work. Since then, several additional concepts for engagement have emerged: NEEDS SATISFACTION: to what degree do employees get to express their preferred self in their work BURNOUT ANTITHESIS: engagement is defined as energy, involvement, and efficacy in work vs. burnout concepts of exhaustion, cynicism, and lack of accomplishment SATISFACTION-ENGAGEMENT: engagement is equivalent to job satisfaction MULTIDIMENSIONAL: this approach distinguishes between job engagement and organizational engagement With so many different definitions out there, which one is right? There isn t a correct answer to this question. If you naturally gravitate towards one of these definitions, then in our experience that s probably the one that s most appropriate for your employees. That said, it s always helpful to understand the range of potential metrics that exist so you can periodically affirm that you are using the best one for your current strategic challenges. The most important characteristic to remember when thinking about employee engagement is that it is a point-in-time assessment of how employees are feeling about their company and their work. Employee engagement can fluctuate frequently depending many factors. Your engagement score might change from month to month or even week to week. Every company is different, and we see companies increasingly moving away from annual surveys because of this reason. Typically, companies move towards a quarterly or monthly pulse survey when modernizing their engagement metrics. HOW DO I MEASURE EMPLOYEE ENGAGEMENT? Regardless of which approach to engagement you re endorsing, almost all engagement data is captured via online surveys. It might seem obvious, but this is the fastest way to scale your approach to understanding employee engagement. As far as providers go, we seen a range of difference approaches. Some companies take a DIY approach and use a generic survey tool like SurveyMonkey to build and administer their engagement surveys. Other companies use out-of-the-box or customizable engagement surveys from providers like CultureAmp, TinyPulse, Gallup, and us at Pomello. The advantage of going with a provider is that you have the opportunity to benefit from their expertise in survey design, which you may not have in-house. In addition, an engagement-specific provider will typically 3

4 provide analytics to accompany the data you collect. These analytics should allow you to tell a story. For example, if you re monitoring engagement and retention on a sales team, you might track whether engagement moves with sales performance. If you have several down months in terms of performance and you see this reflected in your engagement scores, you want to be sure that you retain your top performers by taking action to boost these key individuals level of engagement. When selecting a survey engagement provider, here are a few questions that you can ask to understand their approach and their offering: What model(s) of employee engagement form the basis of your survey? Do you allow customization of your survey in terms of content and frequency? Do you provide analytics in real-time? Are these analytics dynamic, e.g. can I segment my engagement data by different employee cohorts? WHAT IS COMPANY CULTURE? Company culture is a system of shared values defining what is important, and norms, defining appropriate attitudes and behaviors for employees within an organization. Company culture emerged as a concept in the 1980s and 1990s. Similar to engagement, there are a number of different functional definitions of organizational culture, but most center around the concepts of values and assumptions that contribute to the development of norms, behaviors, and other cultural activities. If values tend to be more conceptual in nature, then norms and behaviors are the more concrete building blocks that give these values meaning. Think about innovation as a potential core value. What does that mean in terms of behavior? At Pomello, we d argue that innovative cultures are characterized by employees who are willing to experiment, who are comfortable with risk, and who are quick to take initiative these are the behaviors that underpin this value. An additional critical element in understanding organizational culture is the way that an individual may relate to workplace culture. Just as employee engagement allows for an employee to interact on an individual level with their workplace and their job, our understanding of culture allows for individuals to view different cultures as being more or less attractive. Think about the much-vilified culture at Amazon. Is it possible that rather than being a culture that is fundamentally bad, it is just a culture that doesn t work for some people? Perhaps it is the type of culture that works for hard-driving, aggressive, and results-focused individuals these are the people who will thrive at a company like Amazon. Company culture, or culturedna, can therefore be thought of in the HR framework of attraction, selection, and retention by effectively narrowing the ideal employees for a workplace based on alignment around cultural values and norms. When taken as a whole, company culture is a set of shared beliefs around what is expected, valued, and rewarded in the workplace. This shared understanding plays a large role in determining who gets hired, who is promoted, and who departs from a specific organization. 4

5 HOW DO I MEASURE COMPANY CULTURE? The traditional approach to company culture was through 1:1 interactions, consistent communication, and alignment of incentive systems. These components are all still critically important to managing company culture effectively. The challenge in building solutions like these is that employees are prone to gaming surveys. This gaming can be the result of concerns about retribution by management, but it can also be the result of unconscious influences like social desirability bias when an individual answers a question based on what they believe is the socially acceptable answer, rather than answering in a way that reflects their true preferences. Effective methods for mitigating these influences involve careful survey construction, indirect questioning methods, and a focus on management communication and transparency. Here are a few questions to ask a culture survey and analytics provider to understand their offering: What is your definition of culture? How do your surveys avoid cognitive biases, like social desirability bias, in survey-takers? Can a culture have too many values? Does your model of culture have predictive power? WHAT S THE RELATIONSHIP BETWEEN CULTURE AND ENGAGEMENT? Culture strength will predict employee engagement. The stronger a culture, the higher the employee engagement. This should make intuitive sense. If employees are highly aligned around the beliefs, values, behaviors, and incentives that drive how they act in the workplace, then strong alignment will lead to less social friction and higher productivity. This feeds into a higher level of employee engagement on average. Customer Care Engineering HR & Accounting Sales Adaptability Collaboration Results Orientation Integrity Customer Orientation Precision Transparency 5

6 There are some important differences in how engagement and culture trends emerge over time. Culture predicts engagement, but beliefs and behaviors are slow to change. Engagement is a critical output of a strong culture, but over short time periods will be more volatile than culture. For example, a down month of sales can negatively impact engagement while the culture remains strong. The engagement insight is important to keep tabs on in this scenario, but is not by itself cause for alarm. That s because a blow to engagement on a team with a strong culture will rebound over time. However, a low engagement score accompanied by a trend towards lower culture strength indicates that there s a breakdown in beliefs and behaviors on that team. In this scenario, a manager would need to evaluate why that breakdown is occurring. Has the team grown significantly, and are the new hires onboarding into the culture effectively? Has there been a restructuring or reorg that s disrupting the team culture? Has there been a leadership change or other change in communication that is creating friction for employees? THE BOTTOM LINE It s a brave new world of HR technology, specifically in the areas of company culture and employee engagement. There are a lot of new providers to evaluate, and the learning curve can be daunting. That said, if you re committed to managing these aspects of your employee experience, then you are a step ahead of many companies. The important thing is to hold yourself accountable to consistently caring about the employee experience. The role of technology should be to help you communicate the impact of management decisions and critically tie it back to business outcomes. ABOUT POMELLO At Pomello, we believe that strong cultures lead to happier, more engaged, and more productive employees. We help our customers build strong, high-performing cultures by engaging their employees proactively in the process of defining and crafting that culture over time. Our culture analytics solution provides companies with tools to quantify their culture, so they can understand the strength of their culture, the content of their culture, and its impact on performance. 6