A Key to Employee Engagement - The Employer Alliance

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COVER STORY Work-Life Integration A Key to Employee Engagement To foster high levels of engagement, companies must make greater use of nonmonetary rewards. Retention of top talent is an important concern in both good times and bad. While a soft labor market may have depressed turnover rates in many organizations, retention issues can be expected to surface once labor markets strengthen. Even in the present environment, options are still available to top performers. Savvy organizational leaders recognize that their best people work for their organizations because they want to, not because they have to, and treat them like ‘volunteers’ regardless of market conditions. While compensation is often a factor for employees when they consider new employment, it is seldom the precipitating factor. Nonetheless, retention strategies commonly focus on compensation, for example, retention bonuses and stock options. The downturn has made it more diffi cult to rely on pay to keep key people committed, so how should companies react? Organizations must focus on two key concerns to retain and motivate their talent: increasing employee engagement and developing systems that provide better support for the success of their employees. To foster high levels of engagement, companies must make greater use of nonmonetary rewards such as career growth opportunities, meaningful job designs, by Hay Group COVER STORY COVER STORY 4 5 “ ”
“ High employee engagement alone does not guarantee an organization’s eff ectiveness; you also need real employee enablement. ” training, and recognition programs. For these measures to be eff ective, there must be a clear link between performance and rewards in the minds of employees. The best way to do this is to make sure there is clear diff erentiation in performance ratings between employees. Those diff erences in performance should be refl ected in meaningful diff erences in pay and advancement prospects. Hay Group Insight’s research shows that high employee engagement alone does not guarantee an organization’s eff ectiveness. What’s missing is real employee enablement to position motivated employees to succeed. In fact, our fi ndings suggest that while organizations in the top quartile on engagement demonstrate revenue growth 2.5 times that of organizations in the bottom quartile, companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater. But how do you ensure that you’re doing the best possible job of enabling your employees? The fi rst step is to make sure you’re putting the right people in the right jobs, as employees in the wrong role can quickly become disillusioned and unproductive. In deploying talent, leaders must consider both the requirements of the job and the employee’s ability to meet them. They also have to think about the extent to which the job will draw upon the employee’s distinctive competencies and make the most of them. It’s also crucial to root out bad business practices, such as unnecessary or duplicated work, to ensure that work environments are supportive of high levels of productivity. Create the right climate Finally, organizations have to understand and manage the work climate. The benefi t of a positive work climate is often underestimated, but our research shows that business results can vary by as much as 30 per cent purely due to diff erences in the work climate created by a manager. To create a positive work climate, leaders must have the right competencies to engage and enable employees. They have to understand how to give employees the authority to get on with their jobs so they feel empowered to act where decisions are best made at a local level. If organizations succeed in putting these measures in place they will reap the rewards of highly engaged employees willing to go the extra mile to make the organization a success. And harnessing this ‘discretionary’ eff ort through enabling work environments will provide companies with a competitive edge that will prove invaluable in helping them to ride out the stormy economic conditions created by the global downturn. It will also ensure that they are well positioned when the upturn eventually arrives. Six steps to better engagement and motivation In order to succeed in engaging and motivating employees, organizations should: • Ensure that there is a clearly communicated link between performance and rewards within the organization. • Ensure that there is proper diff erentiation in performance ratings between employees. • Root out bad business practices, such as unnecessary work and duplication, that can adversely aff ect employee enablement. • Put the right people in the right jobs by focusing on job sizing and the kind of person that best fi ts the role. • Monitor and improve the work climate within the organization by ensuring that leaders have the right competencies and management styles to motivate employees. • Focus on non-monetary rewards such as career growth opportunities, development, and recognition programs. About Hay Group This article is reproduced from the May 2009 issue of The Hay Group Leader with the permission of Hay Group. For over 35 years Hay Group Insight, the survey research division of Hay Group, has partnered with the world’s largest and most complex organizations to create value through the strategic use of employee survey research. Our mission is to provide deeper insight to our clients by ensuring their research programs stay ahead of the curve. Hay Group is a global management consulting fi rm that works with leaders to transform strategy into reality. We develop talent, organize people to be more eff ective and motivate them to perform at their best. Our focus is on making change happen and helping people and organizations realize their potential. For further information, please write to Mr Stephen Choo, Regional Director, South East Asia, Hay Group Insight at stephen_choo@haygroup.com. COVER STORY 6 7
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A Key to Employee Engagement - The Employer Alliance

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