Unusual, innovative, and proven tactics to create productive and profitable working environments
The companies in our study see tolerance of mediocrity as the enemy.
For most people, paid work is unsettling and energy-sapping. Despite employee engagement racing up the priority list of CEOs (see, for example, The Conference Board's CEO Challenge 2014), our research into workplaces all over the world reveals a sorry state of affairs: Workers who are actively disengaged outnumber their engaged colleagues by an overwhelming factor of 2:1.
The good news is that there are companies out there bucking the trend, and we've discovered how. We studied 32 exemplary companies (collectively employing 600,000 people) across seven industries, including healthcare, financial services, hospitality, manufacturing, and retail. At these companies, the engaged workers outnumber actively disengaged workers by a 9:1 ratio.
To understand what drives that tremendous advantage, we looked for contrasts between these businesses and a much larger set of companies we know to be struggling to turn around bland and uninspiring workplaces. We found seven elements in place at the companies with spirited employees that are notably lacking in the others. Are all of the seven causes of high performance? No doubt at least some of them involve virtuous circles. But as a recipe for an engaged workforce, these are ingredients we feel confident in recommending.
Have involved and curious leaders who want to improve. Leaders' own attitudes, beliefs, and behaviors have powerful trickle-down effects on their organizations' cultures. Leaders of great workplaces don't just talk about what they want to see in the management ranks -- they model it and keep practicing to get better at it every day with their own teams. By displaying a little vulnerability and visibly working on improving themselves, they signal that such engagement is how one gets ahead.
Have cracking HR functions. The best HR people have a gift for influencing, teaching, and holding executives accountable. This is important because many executives rise through the ranks despite not being very good managers. HR experts teach leaders and managers to stretch and develop employees in accordance with their natural capabilities. By the way, when you find cracking HR leaders, hold on to them for dear life. They are as rare as hen's teeth.
Ensure the basic engagement requirements are met before expecting an inspiring mission to matter. When employees know what is expected of them, have what they need to do their jobs, are good fits for their roles, and feel their managers have their backs, they will commit to almost anything the company is trying to accomplish. Conversely, if these basic needs are not met, even the most exalted mission may not engage them. People simply don't connect with proclamations of mission or values -- no matter how inspiring these might sound in the head office.
Never use a downturn as an excuse. The excuse we hear the most to explain away a lousy workplace is the state of the economy; in periods of belt-tightening, engagement inevitably takes a hit. The experience of the 32 exemplary companies we studied calls this rationalization into question. With few exceptions, they have also had to respond to flat or declining top lines -- with structural changes, redundancies, and declining real pay and benefits -- and yet not only have they maintained their strong cultures, they've improved them. They have achieved this by being open, making changes swiftly, communicating constantly, and providing hope. The truth is that employee engagement is one of the few things managers and leaders can influence in times when so much else is out of their control. Great employers recognize this, and they go about managing it in the right way.
Trust, hold accountable, and relentlessly support managers and teams. The experiences that inspire and encourage employees are local. Strong teams are built when the teams themselves size up the problems facing them and take a hands-on approach to solving them. Exemplary companies lavish support on their managers, build their capability and resilience, and then hold them and their teams accountable for the micro-cultures they create. There is an important corollary here: The good intentions of a CEO can backfire if he or she charges all over the company trying to fix things personally.
Have a straightforward and decisive approach to performance management. The companies in our study with the highest engagement levels know how to use recognition as a powerful incentive currency. Indeed, a hallmark of these great workplaces is that they are filled with recognition junkies. These companies see recognition as a powerful means to develop and stretch employees to new levels of capability. Meanwhile, they see tolerance of mediocrity as the enemy. Any action or inaction that doesn't produce appropriate consequences adds to workplace disillusionment and corrodes commitment.
Do not pursue engagement for its own sake. As it becomes increasingly possible to measure and track engagement accurately, some companies start "managing to the metric." Great employers keep their eyes on the outcomes they need greater engagement to achieve. One of the best examples we can cite is the Hospital for Special Surgery (HSS) in Manhattan. Ranked number one in the U.S. for orthopedics by U.S. News & World Report, this hospital needs a high-octane culture to meet patients' demands. Senior Vice President of Patient Care and Chief Nursing Officer Stephanie Goldberg told us that patients expect miracles, and her nurses would struggle to get through a single day if they themselves did not feel that they mattered to the hospital. HSS' nurse turnover is lower than the industry average, let alone the average in hospital-rich New York.
There they are, then: the magnificent seven. Now note how different this list is from the tactics most companies are pursuing as they try to create great working environments. Many make the mistake of prioritizing the easy, shiny stuff -- hip office space, remote work arrangements, and inventive benefits -- over the elements that will strengthen emotional ties and connect employees more deeply to their managers, teams, and companies. Pity them. If they manage to survive and compete, it will be despite their miserable and confused staff.
Pity their employees more. Our research in more than 160 countries shows that a job has the potential to be at the heart of a great life, but only if its holder is engaged at work. Copious amounts of prose have been devoted to how to make this happen -- by making work more fun, funky, and even meaningful -- but companies still fail. The exemplary companies we studied have figured out how to establish emotional connections with their staff. It isn't easy, but if you focus on the magnificent seven, you too can create a company where people love their work.
The results in this article are based on an analysis of qualitative and quantitative research involving 32 Gallup Great Workplace Award winners. These 32 companies were among hundreds of companies that administered Gallup's employee engagement metric, the Q12, to all employees in 2012; they were selected based on evidence of outstanding employee engagement and its impact on the company's business outcomes and demonstrated best practices. These companies span the globe and represent many industry sectors, including healthcare, financial services, hospitality, manufacturing, and retail. Employee engagement results from these companies were compared with those of other companies in Gallup's three-year rolling employee engagement database, which includes 7.8 million respondents from 352 companies in 179 countries and 13 major industries.
A version of this article first appeared in the HBR Blog Network.