Prof. Vlatka Hlupic: Employee engagement as business intelligence

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“The annual survey gives you a snapshot on how staff are feeling about their work, but little else. It’s not directly linked to wider performance.”

If you work in HR, the annual employee survey is probably your responsibility. Scores may be high, low or middling. They may vary from unit to unit. But what are they actually telling you? Is the act of gathering the stats helping the business, or the employees or both? Or even – heretical thought – is the whole exercise counter-productive? Does it take up a lot of your department’s time only raise hopes among staff for improvements in working conditions that never arrive?

The annual opinion survey could be regarded as ‘Employee Engagement 1.0’. It gives you a snapshot on how staff are feeling about their work, but little else. It’s not directly linked to wider performance.

Some of us have dedicated ourselves to developing Employee Engagement 2.0 and successors, and the results are exciting: potentially transformational for business management as well as the HR function.

We have drawn upon a much wider range of disciplines than standard texts on motivation such as Herzberg and Maslow. We also draw on the latest findings from social neuroscience and complexity theory. This isn’t some esoteric academic exercise. On the contrary, it makes the whole thing more practical and business-like: we’re looking at the actual links between how people behave internally, and how the business performs, in terms of delighting the customer and innovating new ways to keep on doing so.

Ultimately, a business is about making a product or a service. It’s done by people, and the customers are people. So if we have a much deeper understanding about teamwork, skills, relationships and morale, we’re better equipped to understand what’s working, and what’s not. In addition, we have developed practical ways to improve organisational culture, and to demonstrate the links with better performance.

First, it helps to redefine ‘the organisation’, as an organic, living entity, rather than a static set of assets. This helps us recognise the importance of leadership culture and engagement. For example, we’ve learned that a positive leader’s energy actually ripples out into the wider organisation, potentially energising everyone.

The research behind these findings has been used to develop practical tools for gauging organisational culture, and for improving both culture and performance. In terms of measurement, this is set out in five ‘levels’ of performance, from Level 1 – listless and dysfunctional, to Level 5 – passionate and unbounded commitment (see Figure 1). What the applications in organizations have shown is that there is a particularly powerful lift in culture and performance by moving from Level 3 – typical ‘command and control’, to Level 4, which features high levels of engagement.

fig1
Figure 1: Five Levels of Individual and Organisational Performance

Level 5, by the way, represents super-high, passionate engagement, that is probably only sustainable for limited periods of time. The priority for most businesses, most of the time, is the shift from 3 to 4.

A key feature of this approach, which I call ‘The Management Shift’ *, is that these operational Levels apply both to individuals and to organisations.

At the individual level, leaders are asked in detail about how they manage people, and about their colleagues and the organization. The questionnaire has 100 questions – 20 for each of the 5 Levels. They are asked the extent to which they agree with a statement, using a six-point Likert scale, which omits a ‘safe’ central option by having an even number to select from. Statements include: ‘I do not tolerate mistakes’ and ‘I am very directive dealing with employees.’

A similar questionnaire is used at the organizational level, based on research that demonstrates the factors that drive superior performance. It is now well-established that higher-performing companies that are innovative, resilient and profitable have high engagement. They feature the following principles: 1. Openness, 2. Community, 3. Meritocracy, 4. Activism, 5. Collaboration, 6. Meaning, 7. Autonomy, 8. Serendipity, 9. Decentralization, 10. Experimentation, 11. Speed and 12. Trust.

But engagement per se is not enough: it needs to be directed towards the customer and the strategic goals. Hence this model includes an analysis of these links. The organizational part of the model features six different dimensions. Three are people-based: Culture, Relationships, and Individuals; while three relate more to organizational set-up: Strategy, Systems and Resources. This is known as the 6 Box Leadership Model. In this way, we can determine if, say, Culture or Systems are operating at Level 4.

What is even more important than the questionnaire results is the learning. Through a 10-week programme I have seen leaders and their teams successfully make the shift from Level 3 to Level 4 (see Figure 2). This does not merely improve performance, it may even be essential for corporate survival. Companies have to motivate millennials and respond to rapid technological and demographic changes. This is difficult to achieve with a ‘command and control’ culture.

Figure 2: A Ten-Week Programme for Lifting Performance to a Higher Level

There are huge implications for management development. Culture is shaped by management, but it also works the other way around: culture affects managerial style. Many who are by temperament good at handling people may feel constrained to just set targets and deadlines, and issue instructions – operating at Level 3 – because ‘that’s the way it’s done around here’. If a more enlightened leadership then comes in that wants an empowering approach it is probably better to develop these managers rather than replace them. This is likely to be cheaper, more ethical, and produce better business results.

With this Management Shift approach, headline employee engagement scores are replaced by deeper organisational intelligence. This helps us understand more about what is happening in the company, why it’s happening, and how it can be improved.

 

 

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About Vlatka Hlupic

Professor Vlatka Hlupic is a business adviser, author and Professor of Business and Management at Westminster Business School. At the School, she is also Director of the Emergent Leadership and Development research group. She is author of the award-winning book ‘The Management Shift - How to Harness the Power of People and Transform Your Organization for Sustainable Success’ and was voted one of the Most Influential HR Thinkers in the world by HR Magazine in 2015 and 2016. A renowned professional keynote and TEDx speaker, she regularly presents at major business events worldwide.

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