Turning Employee Engagement into Competitive Advantage: The Importance of Measurement

You’ve heard the old saws: What gets measured, gets done. What gets measured, gets managed. What can be measured can be improved. These sayings have been attributed to many individuals (including Tom Peters, Peter Drucker, and others) but they have been around a long time (some say the concept originated with Rheticus in the 15th century!)

But no matter who said it first or when they came around because they are true. And here’s something else that’s true:

“Globally, only 37% of companies track Employee Engagement. Therefore, only a small percentage of companies can measure the link between employees, customers, and profitability. The majority of businesses cannot demonstrate the ROI of Employee Engagement.” (Source: EdelmanEngage)

Our last blog discussed why so few companies conduct this type of measurement and analysis. The data may be owned by different business functions: marketing owns customer information, finance and operations own business performance metrics, and HR owns employee measurement. Additionally, the timing and nature of the data may make it difficult to draw connections and correlations.

But aside from these logistical or mechanical challenges to measuring the linkages between employees, customers, and performance, there are some higher-level or strategic questions that keep businesses from leveraging Employee Engagement to the bottom line and competitive advantage.

How do you define Employee Engagement?

Because HR owns the employee relationships, most Employee Engagement definitions focus on HR concerns: employee satisfaction, intention to continue working at the business, willingness to recommend a friend for employment, and satisfaction with training, pay, and benefits. In fact, the Society of Human Resource Managers writes: “A number of definitions exist; however, they all share these common elements. Engaged employees will: Feel satisfaction with their work. Take pride in their organization. Enjoy and believe in their work. Understand the link between their job and the organization’s mission. Feel valued by their employer. Fully commit to their employer and their role. Exert extra effort to contribute to business success.”

So, it should be no surprise that most companies do not include issues about the customer in their Employee Engagement definitions. As reported by EdelmanEngage, only 56% of companies globally include customer issues in their Employee Engagement models.

The linkages between employees, customers, and business performance should be fundamental throughout your Employee Engagement model. Employee Engagement should be defined – and designed – to answer three questions:

  1. Are employees engaged in the business as an employer?
  2. Are employees engaged in providing great service to customers?
  3. Are employees engaged in helping the company meet – and exceed – its goals?

By including a balance of all three elements in your definition of Employee Engagement, you lay the groundwork for consistent, periodic measurement.

Do you have a specific Employee Engagement strategy?

While we started by saying “What gets measured, gets done,” that’s only half the equation. The other half is having the attention and commitment by the right parties within your business. By having a specific, stated Employee Engagement strategy, you get the commitment of Executives and the Board. Employee Engagement does not work without a company-wide commitment from the top down and the bottom up. Intuitively we know that Employee Engagement, corporate culture, and performance are intrinsically linked – and for that reason, Employee Engagement must be the responsibility of the most senior leaders of the business.

However, just over half (55%) of companies globally have an explicit Employee Engagement strategy.  Without an explicit strategy, it is difficult to determine what to measure, and what actions to take to achieve the strategy. All companies’ Employee Engagement strategies will be unique and customized to achieve their specific competitive advantage. In developing your Employee Engagement strategy answer these questions (adapted from EdelmanEngage):

  • How will Employee Engagement help deliver business performance goals and objectives?
  • What will we do – and not do – to improve Employee Engagement?
  • What are the Employee Engagement drivers for our business and how can we use them to move the needle?
  • How do we do this with different employee and customer segments?

Defining Employee Engagement and having an explicit Employee Engagement strategy will provide the foundation for determining which metrics will be most important to track. Because we all know the importance of measuring progress toward success. After all, “What gets measured, gets done!”

Leave a Reply

Your email address will not be published. Required fields are marked *