Sure, companies should measure engagement. But they should never stop acting on what they've learned.
It's a common and often persistent problem: Companies diligently measure employee engagement, relentlessly analyze the data, and go to great lengths to communicate their survey results. Yet engagement doesn't improve.
The top-performing properties had articulated a clear leadership and vision statement.
In our experience, those companies have something in common. They pay too much attention to measurement and not enough to creating real change. One Gallup client, a global hospitality chain, is such a company. Employees at all levels -- from the company-owned properties to the corporate office -- had taken Gallup's Q12 employee engagement survey for several years and had seen positive growth in engagement from their action-planning efforts.
Now company leaders were looking for a new strategy to continue their positive momentum, so they shifted their focus. They set out to discover what the company's best practices were and the obstacles that were blocking engagement. Then they communicated what they learned throughout the organization. To encourage employees to buy in to upcoming education and changes, they worked to tie engagement to the company's key outcomes, ensuring that each leader understood the dollars-and-cents impact that employee engagement -- and the resulting performance increases -- would have on the business.
The steps this hospitality company took to improve its employee engagement -- and to make its investment in engagement stick -- are a model for any company in any industry with leadership that is frustrated with stalled or declining engagement.
Step 1: Conduct best-practice studies
Executives at the hospitality company knew that some teams and managers were much more engaged than others. So they embarked on a study with their Gallup partners to determine what their most engaged hotels were doing differently from the rest. Their goal was to make these properties' best practices a model for the rest of the organization.
When conducting a best-practice study, it is important to select two contrast groups -- teams with high engagement and teams with low engagement -- using strict criteria:
- engagement results that place the teams in the top or bottom 10% or 25%
- outcome metrics or key performance indicators that reflect the company's values
- a review by company leaders for any outlier information or extenuating circumstances that could skew the data
Once the contrast groups had been identified, the best-practice study began with a two-day site visit at five of the company's top-performing hotels, followed by visits at several lower-performing properties. It quickly became apparent that there were differences between these groups in five key areas. The top-performing properties had articulated a clear leadership and vision statement, and employees at the hotel understood it and acted on it. These properties also excelled at day-to-day operations in four key areas: culture, communication, performance management, and systems and processes.
Company leaders then set up a global webinar series to share what they learned. Corporate leaders also asked each hotel to draft a leadership statement that employees could use as their local guide while incorporating the best practices discovered during the study.
Step 2: Identify engagement opportunities
Managers who encourage employees to challenge the status quo will reap the rewards of an innovative team.
Next, the company broadened its approach. Engagement levels at the corporate office had trailed those of the hotel properties since the inception of the employee engagement program, and executives wondered why. Gallup conducted 25 one-on-one interviews with corporate employees from various departments to determine how to improve engagement and performance. These interviews revealed that three key obstacles were blocking further progress:
- The corporate offices were rife with silos. Employees were encouraged to work only within their functions, which constrained communication.
- Performance management was weak. Managers who were poor at performance management weren't equipped to deliver tough and honest feedback. As a result, they found it difficult to get employees to participate in performance improvement efforts.
- A "status quo bias" prevailed. Front-line employees believed that managers and leaders were uncomfortable with new ideas. Instead, they were content to rely on policies and procedures that were in place and weren't open to new ways of doing things.
Not all departments in the corporate office had these problems. As with the hotel properties, there were pockets where good communication, high performance, and innovation existed. But in departments with these problems, engagement suffered.
Once the problems were identified, the company conducted a second best-practice study, this time at the corporate level. The executive leadership team is now incorporating the best practices they discovered in management training and development for employees in the corporate office.
Step 3: Demonstrate links to business outcomes
For an engagement program to succeed, it must be aligned with and support the company's mission, strategy, and business objectives. An engagement program that lacks a strong tie to financial objectives won't prove its worth in investment dollars. Too many companies that measure engagement neglect to connect engagement to business outcomes, yet that is probably the most critical element of any engagement program.
Engagement is often a leading indicator of financial outcomes. To measure the impact of its engagement initiative in dollars, the hospitality company quantified the effect of engagement on its business across three domains: financial, customer, and workforce. The company compared 2009-2010 engagement changes to 2010-2011 business outcomes for key metrics, including average daily rate (ADR), revenue per available room (RevPar), and customer satisfaction.
The results were impressive. Using metrics such as RevPar, ADR, turnover, and call center performance, the company realized a net benefit of about $100 million in revenue attributable to improvements in engagement.
Increasing engagement and business impact: Steps any manager can take
The study showed that investing in employee engagement was a good use of the company's time, money, and effort. But real improvement and real results came when executives and managers looked beyond the numbers and focused on best practices. The study gave leaders and managers insight into what they could do better every day -- and these are actions executives at any company can take:
- Listen. Managers often believe that they know best -- or that they have a formula for success. That's fine, and to be expected of confident supervisors. But employees need to feel that they have a manager who listens. Employees are more likely to be engaged if they work in an environment that encourages them to share their thoughts, opinions, and feedback -- and they understand that not every idea can be implemented. Managers should allow 10 minutes in staff meetings or two minutes in huddles for employees to talk about crucial experiences. Sharing how they have created a superior customer experience and how that experience could be replicated for other customers -- or discussing anything else that's on their minds -- could improve the team's engagement and performance.
- Challenge the status quo. Processes and policies that have improved performance in the past can still be improved. At the hospitality company, this key learning was implemented in the properties and at the corporate office. Employees now regularly look for new ways to drive internal efficiencies or to increase customer value. And managers who encourage employees to challenge the status quo will reap the rewards of an innovative team.
- Tear down silos. The hospitality company learned that silos emerge when managers or leaders constrain communication -- for example, when all communication must run through a specific manager and employees in different functional areas aren't free to talk with each other. The company's managers now actively break down these silos by introducing their employees to colleagues in other areas and encouraging them to build relationships and work together to solve problems.
As this company learned, building engagement and boosting performance require focus and effort. Engagement doesn't come from conducting a survey or reading a report. It's an ongoing process, and it often takes place in everyday exchanges. Start with the data, then dig deeper with a best-practice study as a springboard and guide. This hospitality company did -- and learned that the conversations that arose as a result of these efforts are where real change happens.