What makes your employees different than the competition’s?
You’ve established a competent human resources team, they advise you that your company is paying within the industry established guideline for your talent, and suggested the range of salaries to apply based on an individual’s success. You can relax satisfied that your employees will not be jumping ship because of a major wage discrepancy, and you can reward your top performers.
But wait: Your competition did exactly the same thing!
If salary was the only way to motivate employees, it could safely be assumed a dollar spent in our company would have the same impact as a dollar spent at the competitor; we would expect business dominance to be purely determined by how much could be spent on human capital.
We know from personal and external experience that this just isn’t the case: Some companies accomplish much greater output and success with a smaller expenditure on employees while others perform poorly (or even wallow and die) with the largest personnel budgets. For some very public examples, you only need look as far as major league sports.
How do you know how valuable each dollar spent on Human Capital is? How can you measure Human Capital return on investment (ROI) with enough detail to take action?
More and more the value created in organizations comes from creativity and leadership. Being creative, or sticking your neck out and showing leadership, require a high level of commitment from your employee base. Fully-engaged employees are committed employees, their mentality is: How Can We Grow?
When commitment is low, like when there are strong union vs. management mentalities, or layoffs abound, the ROI on human capital is also low. Employees do what they need to do to get by, the don’t fully engage, they don’t stick their necks out and try that next new thing that is going to make a business wildly successful. These employees are continuously asking: What Do I Get?
The common methods to establish output of an organization –in employee terms– is to measure how ‘engaged’ or ‘satisfied’ your employees are [we prefer the prior -ed.] by means of a survey. This fits well with the growing desire to implement ‘Business Intelligence’ systems, which can provide a timely set of metrics for the leadership team to establish where action needs to be taken. Certainly if it is worth measuring other business processes (lead times, order entry, book to bill, yields, etc.) it is perhaps even more valuable to measure how engaged your workforce and customers* are!
Just knowing the iceberg is ahead changes nothing if no action is taken to avoid it.
Measurement and metrics are a great start, you need a baseline to know where you are starting from, and how your organizations actions impact the metrics, but action is essential! This is –of course– the hardest part. You now have metrics for your workforce on how engaged these employees are, and a million rationalizations for why some groups are low and some high.
Company-wide improvement requires local action.
This is a thinly disguised version of the almost cliché: “Think globally act locally.” Well, sorry to be cliché, but it is true! Individual teams, offices or branches need to take the initiative to improve their own level of engagement. Corporate-wide strategies to address person-on-person issues become so generic as to become inert. For example, if you have a multi-national organization, local culture will indicate different solutions to engaging employees, and your local managers must play a role in this. Even within the same country, you will have teams that are comprised of different cultures and different socio-economic backgrounds. The end goal is to find, train and reward the best ‘engagers’ in your organization.
The answer is staring at you in every town-hall meeting: they are out there, you just have to find them.
Every organization that undertakes analysis of their employee engagement will find results that look much like a scatter plot. At the high end, are teams/branches/offices where talent in engaging employees exist. This may be a key individual, like a stellar manager who gets results while fully engaging his employees, or –more likely– a group of people who understand that there is a positive feedback loop created when team members look out for each other and for opportunities for the team to grow and excel. At the low end of the scale are areas that need some serious and rapid remedial action. Many studies point to the fact that ‘actively dis-engaged’ employees and managers actually have a net negative impact on business. To state this another way, every dollar spent on this Human Capital actually has a negative ROI.
These aren’t bad people, and are not lost-causes, it has likely been a while since anyone took a hard look at what engages these people, and found a way to push on their levers to get them re-engaged. Like any skill, engaging employees needs to be learned and practiced by individuals and teams to get good at it. Leadership of under-engaged teams need to be held accountable to provide detailed plans (involving feedback from their employees & customers) and to execute on strategies to improve the engagement level… and they need help.
Engaging the Engagers.
With knowledge of the teams that are highly engaged, a clear message must be sent that this is the desired state of affairs. These high-performing teams can be leveraged to help generate ideas for the managers and teams that are low in engagement, and should be rewarded in a way that is visible to the rest of the organization. While rewards are a very personal thing: promotions, training opportunities, public ceremonies, selection of the best projects or other tailored levers can be used to make it very clear that teams that maximize their engagement and performance will rise to the top in the organization. Simply bringing some of the high-performing teams together in a suitable off-site setting to cross-pollenate ideas would be a form of reward, that would also result in direct positive business outcomes.
Like with any potential investment, the ROI on Human Capital must be defined, measured and maximized. Engagement is the method to move employees from “What do I get?” to “How do we grow?”. When your employees ask “How do we grow?” they are starting to care as much about your business as you do.
If you would like to continue on discussion about leveraging Human Capital and proven methods to increase engagement in your organization, drop us a line.
*This specific topic will be addressed in a future blog post, as there is a directly link between employee and customer engagement and customer engagement is JUST as important.
PDF 
Recent Comments