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Employee Engagement Survey Research 101

UNDERSTANDING WHAT DRIVES EMPLOYEE ENGAGEMENT AND SATISFACTION

At Insightlink, we believe that there should be two main objectives of any organization-wide employee survey:

1. The first objective should be to get an overall measurement of employee satisfaction and/or engagement. These are what we call the "thermometer" survey measures because they tell you how your employees currently feel about working at your organization.
2. The second objective is to understand the motivations and drivers behind those thermometer measures - whether they are high or low - so that your organization can take meaningful action to both maintain its strengths and address its weaknesses. These are the "diagnostic" survey measures that help explain the thermometer results and give you clear direction on where improvement is required.

HOW DO YOU TAKE THE TEMPERATURE OF YOUR ORGANIZATION?

There are many cases where temperature is an important indicator of physical condition, such as checking the temperature outside before deciding how to dress and having your doctor take your temperature to determine if you have a fever.

To remove the guesswork and measure how engaged and satisfied an organization's employees are, the temperature of an organization by means of a well-designed employee survey needs to be taken. Annual revenues, profits, the share price, certainly help indicate the health of a company but without measuring the temperature of the organization's "human capital", the company's health may be at risk. Extensive evidence shows that how employees feel about their jobs strongly influences the performance of an organization.

And what is the best way of taking the temperature of an organization's human capital? We believe that the best approach is to measure overall job satisfaction because:

1. Overall job satisfaction is a simple measure that all employees understand,
2. Employees answer based on what is important to them individually, and
3. It provides a straightforward and easy-to-use measure on how employees are feeling.

In our experience, this single measure of overall job satisfaction is the most effective thermometer measure of the "health" of an organization's human capital.

And what is the health of human capital these days? Based on Insightlink's annual normative benchmark study, just less than six-in-ten employees in the U.S. are either extremely satisfied or very satisfied with their jobs.

Since we recommend that organizations should target having at least 65% of employees who are extremely or very satisfied with their jobs, there is clearly some room for improvement in the U.S.

Combining overall job satisfaction and an employee's anticipated tenure (that is, how long they believe they will stay at that organization) we create a Loyalty Matrix which gives an even stronger sense of how employees feel about their jobs.

WHAT DO THE GROUPS IN THE LOYALTY MATRIX MEAN?

Committed Loyalists

These are the employees who are highly satisfied with their jobs and have a long-term intention to stay with their organization. Through the positive contributions they make to productivity, customer satisfaction, the morale of their co-workers and ultimately, to their organization's financial performance and overall success, they are the foundation of their organization's human capital.

However, since only 50% of employees in the U.S. can currently be characterized as Committed Loyalists, organizations should deliberately seek strategies to maximize the size of this group.

Satisfied Opportunists

These employees are satisfied with their jobs but are not deeply committed to the organization in the long-run. As a result, they are both an asset and a liability. They are happy and productive workers, but they represent a risk of employee turnover. Their lack of commitment to their organizations means that they can be lured away by other employers.

Although just 6% of employees in the U.S. are Satisfied Opportunists, in an improving job market or when there is competition between employers for scarce talent, these employees may leave just when your organization can least afford it.

Change Seekers

These employees are actively on their way out of their organizations, lacking both commitment and intention to stay. They are apt to be less productive than their more committed colleagues and may also be a drag on the morale of those around them.

With Change Seekers currently accounting for 17% of the U.S. workforce, an organization with a large percentage of non-committed employees is vulnerable to higher-than-necessary turnover costs that will negatively impact their bottom line. As the economy shows signs of improvement, new job opportunities will provide ChangeSeekers with exit opportunities. Rather than trying to convert their current Change Seekers, organizations should explore ways to prevent employees from becoming Change Seekers in the first place!

Dissatisfied Compromisers

These are the employees who are unhappy with their jobs, but have no intention to leave. While they don't directly contribute to turnover costs, they may still drag down their organization's financial performance through lower productivity and, in many cases, by lowering the morale of others.

More than one-in-four employees in the U.S. (26%) fall into the category of Dissatisfied Compromisers and they likely make a major contribution to the estimated loss of $350 billion dollars a year through employee disengagement

What does the Loyalty Matrix mean from an HR perspective?

The primary implications of the Loyalty Matrix include:

• Increasing your proportion of Committed Loyalists is central to connecting your HR efforts to your organization's bottom line.
• It may be difficult to convert Satisfied Opportunists into Committed Loyalists because these employees are "hardwired" to be on the lookout for new opportunities. Organizations should have a plan in place to deal with the turnover that Satisfied Opportunists can cause.
• Keeping Change Seekers to an organizational minimum is key to controlling turnover costs. This requires building a meaningful and enjoyable work environment that prevents employees from being disenchanted and, in turn, looking for the chance to leave.
• Decreasing the impact of Dissatisfied Compromisers on the organization - either by improving their satisfaction with their jobs, or reducing their negative effects on their work and those around them - can protect the organization's bottom line. Our experience suggests that the proportion of Dissatisfied Compromisers is not "set in stone" and will vary in response to organizational changes, both positive and negative. A careful evaluation of your work environment can lead to worthwhile action planning that will shift at least some Dissatisfied Compromisers into becoming Committed Loyalists.

WHAT IS THE ROLE OF EMPLOYEE ENGAGEMENT?

Employee engagement can best be summarized as a dynamic partnership in which employees bond with their organization and with one another through shared understanding and common purpose. In other words, engagement is a state in which employees are fully involved in their work - physically, cognitively, and emotionally.

In a highly engaged workplace, employees understand and agree with the company's strategic goals, are clear about how their work fits into making those goals a reality, are motivated to go beyond narrow job definitions to meet those goals and are confident that their efforts will be recognized and rewarded by their peers, managers and the organization as a whole.

At Insightlink, we see "engagement" and "job satisfaction" both playing important roles as thermometer scores. It is important to note that we see engagement as an aggregate measure distinct from job satisfaction. We use 15 individual attitude and rating measures in the calculation of an Employee Engagement Index. Because there is no clear decision on whether job satisfaction leads to engagement or if engagement leads to job satisfaction we do not include job satisfaction as one of these ratings.

The current level of Employee Engagement in the U.S.is just 66 on a 0-100 scale, which shows that there is some real room for improvement in this area:

Increasing the level of employee engagement in an organization can result in a number of important outcomes:

1. Employees develop a strong emotional connection with the organization, making them less likely to leave and more likely to act as "ambassadors" for that organization.
2. Higher levels of engagement result in higher levels of innovation and creativity among employees.
3. Employees develop better relationships with work colleagues, which build morale and camaraderie.
4. Organizations with high engagement also see improvements in customer satisfaction - engaged employees deliver higher quality service as their commitment comes across to customers.

Perhaps most importantly, as employee engagement increases, so does an organization's bottom-line success.

HOW SHOULD YOU DECIDE WHAT ACTION TO TAKE?

As a framework for an effective diagnostic analysis of employee survey results, we use our proprietary 4s model of employee satisfaction and engagement. Each of the 4Cs - Commitment, Culture, Communications and Compensation - make an important contribution to t the job satisfaction and employee engagement.

The 4Cs work as a kind of ladder, similar to Maslow's Hierarchy, starting with Compensation as a necessary "hygiene" factor, rising up through Communications and Culture, then up to Commitment as the highest order factor: Commitment The Commitment measure includes how well employees' roles and responsibilities "fit" their skills and training, as well as the sense of accomplishment they get from their jobs and their willingness to go "above and beyond" their stated job tasks We measure employees' perception of commitment both "to" and "from" the organization Culture Culture is a wide-ranging category that includes such measures as work environment, effectiveness of vision/values, application of company policies, understanding of employee issues, job security, effectiveness of management and work/life balance Communications Our diagnostic measures include the overall effectiveness of communications within the organization, as well as the effectiveness of interactions with supervisors, management and coworkers Compensation Compensation is a basic condition of satisfaction and productivity among employees We have found, though, that the perceived fairness in distribution of compensation can be more influential than the absolute level of pay

How can the 4Cs help an organization design a meaningful plan of action? For many of our 4Cs ratings, we look for areas that are most in need of attention. Based on our most recent normative benchmark study, the largest gaps among U.S. employees in each of the 4Cs are as follows: Commitment Providing opportunities for all qualified employees to move into management or other leadership positions Fairly and equitably providing employees with the opportunity to develop and use their full expertise toward meeting the organization's goals Culture Agreeing that the most qualified people are selected when opportunities for promotion come up Feeling that people get ahead primarily based on the merits of their work Communications Agreeing that senior management listens and responds to employee ideas Believing that senior management communicates decisions that affect employees effectively and efficiently Compensation Agreeing that senior management cares about paying employees competitive wages Acknowledging that their pay is directly related to their job performance

Across all U.S. organizations, these factors represent the strongest priorities in terms of trying to match what is important to employees with how well their organizations perform on those same measures.

WHAT ARE THE MAIN DRIVERS OF JOB SATISFACTION IN THE U.S.? In addition to examining the size of the gaps between importance and performance across each of the 4Cs, it is also possible to determine which employee attitudes and opinions have the most powerful impact on job satisfaction - these are what we call the drivers of job satisfaction. Among American employees as a whole, the most important drivers of job satisfaction currently are: Having enjoyable work Satisfaction with the level of reward and recognition The opportunity to learn new skills and to grow The opportunity to make suggestions and be involved in their work The degree to which the work done is respected Satisfaction with their organization's operating systems and standards Satisfaction with the resources available to them How fairly the work is divided in their department/organization Having work that makes good use of their abilities and skills Satisfaction with the effectiveness of communications Satisfaction with your ongoing training and development Satisfaction with your opportunities for advancement These, then, are the factors that have the greatest impact on deciding job satisfaction. However, this is only half of the story because it is equally important to answer the question: How well are U.S. organizations fulfilling these fundamental expectations of their employees?

To answer this question, each driver is classified into one of three groups: Equities (High contribution and high performance) Opportunities (High contribution and moderate performance) Weaknesses (High contribution and weak performance) Here is how the top drivers of job satisfaction in the U.S. fall into these three categories: Equities (High contribution and high performance) Work is enjoyable Makes good use of abilities and skills Opportunities (High contribution and moderate performance) Work is respected Learning new skills Making suggestions/being involved Operating systems Weaknesses (High contribution and low performance) Communications Reward and recognition Division of work Resources available Ongoing training Opportunities for advancement

As should be clear from this analysis, there is much room for improvement on many of the fundamental drivers of job satisfaction in the U.S., which helps to explain why job satisfaction and employee engagement are currently only at moderate levels.

WHERE DO I START IN MY ORGANIZATION?

The best place to start is to collect the "thermometer" measures that we believe are so important to determining the health of your human capital. In addition to collecting the appropriate survey data, review other key indicators of organizational success, including performance reviews, retention data, exit interview results and measures of productivity.

It is also important to talk directly to your employees - ask them what they like most about working for your organization and what they like least about working there. Begin compiling your organization's equities, opportunities and weaknesses and, while you are doing that, look at what other organizations do well.

Based on our work with many different organizations of many different sizes and across many different industries, the primary weaknesses or gaps contributing to low levels of job satisfaction and engagement include:

• Poor job definitions
• Inadequate training and development
• No set policies regarding reward and recognition
• A lack of advancement opportunities
• Failure to communicate the requirements for success within the organization
• A lack of transparency around promotions
• A lack of a connection with senior management
• Low levels of trust in senior management
• Ineffective communications
• What is seen as an unfair division of work
• A lack of pay for performance programs or policies
• Low levels of organizational momentum
• Extremely high levels of stress, which often lead to little sense of work/life balance

Once you have identified the main gaps within your organization, choose one or two of these priorities and develop an action plan. Here are a couple of possible examples:

• If the clarity of job definitions is a problem, update job descriptions and ensure all employees are aware of their roles and responsibilities.
• If your organization is not effectively fulfilling its mission/vision/values, commit to action that will clarify the most important organizational objectives, ensure that employees can connect their work to these objectives and then use all means possible to communicate these objectives (whether defined as the mission, vision, values or some combination of all three) to all employees.

WHAT DOES ALL THIS MEAN?

Based on Insightlink's benchmark norms among all U.S. employees, taking direct action to improve communications, to increase employee recognition in meaningful ways, to manage how much is expected of employees, to address perceived inequities in compensation and to reinforce the organization's mission/vision/values will help raise overall job satisfaction and reduce turnover, leading to a more engaged and committed workforce within organizations throughout the U.S.

If you are ready to start making effective change within your organization, an Insightlink 4Cs employee survey can help. Contact us at 1-866-802-8095 ext. 705 to get more information.