Employee engagement does not mean employee happiness. Employee engagement doesn’t mean employee satisfaction. Employee engagement is the emotional commitment the employee has to the organization and its goals.
This emotional commitment means engaged employees actually care about their work and their company. They don’t work just for a paycheck, or just for the next promotion, but work on behalf of the organization’s goals.
When employees care—when they are engaged—they use discretionary effort.
Engaged Employees lead to…
higher service, quality, and productivity, which leads to…
higher customer satisfaction, which leads to…
increased sales (repeat business and referrals), which leads to…
higher levels of profit, which leads to…
higher shareholder returns (i.e., stock price)
The Puzzle of Motivation:
Dan Pink introduces ‘The Candle Problem’ – attaching a candle to a wall with a box of thumbtacks and matches to that it doesn’t drip. 2 groups try to solve the problem – one is told they are timing to discover norms, while the other is given money if they are in the top 25%. This test consistently shows that the group being given money is 3minutes slower than the other. Other research over 40 years backs up the idea that for most tasks you can’t incentivize people to perform better with money. This is one of the most robust findings from social science, but also the most ignored. There is a mismatch between what science knows and what business does.
Employees want to join an organization not only for the great experiences they will receive in their work, but they are also interested in the perks that will help them grow outside of the workplace. Total Rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate and retain employees. To an employee or candidate for employment, the notion of total rewards includes perceived value as a result of the employment relationship.
What is Included in a Total Rewards Package?
The package typically contains elements of compensation, benefits, work-life benefits, performance recognition and career pathing opportunities. Following are general suggestions of what can be considered when putting together a total rewards package:
1. COMPENSATION: In general, most employees regardless of title or role within the organization have an expectation regarding their compensation. Following are ideas of pay that can be distributed in ongoing, short and long-term increments.
- Fixed pay — Generally, this is the base pay offered to an employee. It usually is determined by the organization’s pay philosophy and structure and should be competitive based on the economy and other organizations with similar positions.
- Variable pay — This is pay that varies and changes in accordance with the level of performance or results achieved. This is one-time payment such as a bonus, which must be re-established and re-earned each performance period.
- Short-term incentive pay — This is another form of variable pay. It is implemented as a way to focus and reward performance over a period of one-year or less.
- Long-term incentive pay — A form of variable pay, long-term incentive pay is designed to focus and reward performance over a period longer than one year. Typical forms include stock options, restricted stock, performance shares, performance units and cash.
2. BENEFITS: Health and dental insurance are what come to mind when discussing employee benefits. There are also value-added benefits that can be offered within the insurance plans. Employee assistance programs, discounts on fitness programs and health incentive programs are also ways to expand the offerings to employees.
3. WORK-LIFE BENEFITS: Leaders continually recognize the need for employees to have opportunities to enjoy their personal time off. Incorporating social activities within the workday provides the feeling of downtime, while still on the clock.
4. PERFORMANCE AND SERVICE RECOGNITION: There was a time when employees worked their entire career for one employer. Although those days are long gone, companies are still seeking ways to recognize performance and loyalty to the organization.
- Service awards
- Retirement awards
- Peer recognition awards
- Spot awards
- Managerial recognition programs
- Organization-wide recognition programs
- Exceeding performance awards
- Employee of the month/year awards
- Appreciation luncheons, outings, formal events
- Goal-specific awards (quality, cost-savings, productivity, safety)
- Employee suggestion programs
- Weekly manager and direct report meetings
- Performance evaluations
5. CAREER DEVELOPMENT: These are opportunities for an employer to grow individuals while they are with an organization. The employees will also recognize that these skills can be used to propel them to new levels in their career.
- International assignments
- Internal promotions or transfers
- Succession planning programs
- Tuition reimbursement
- Corporate universities and mentoring programs
- Seminars workshops and conferences
- Online learning and webinars
- Self-development courses
- Leadership training
Employee engagement goes beyond activities, games, and events. Employee engagement drives performance. Engaged employees look at the whole of the company and understand their purpose, where, and how they fit in. This leads to better decision-making. Organizations with an engaged workforce outperform their competition. They have a higher earning per share (EPS) and recover more quickly after recessions and financial setbacks. Engagement is a key differentiator when it comes to growth and innovation. To better understand the needs of your organization, administering an employee engagement survey is key. This is not the same as a satisfaction survey.
Moreover, expectations of employees have changed. Mobile professional careers are much more common than “job for lifers”. Retention of top talent is more difficult than before. A company that has an effective employee engagement strategy and a highly engaged workforce is more likely to retain top performers as well as attract new talent. Successful organizations are value-driven with employee-centric cultures.
Culture Of Employee Engagement:
For a business owner … You want hard-working employees who are actively engaged with the work they do. You can create a culture of organizational engagement by doing the following.
1. Don’t Skip Onboarding And Training
2. Set Company Goals
3. Acknowledge Employees
4. Focus On Employee Development
5. Don’t Micromanage
Fit for the future:
With a quarter of employees worldwide set to change jobs by 2018 and the megatrends already reshaping employee engagement, here are five key steps you can take now to future-proof your engagement strategy:
1. Know what you’re up against:
Assess which megatrends will have the greatest impact on your organization. What are their implications for your workforce? How will they affect engagement among your employees?
2. Audit where you are now:
What changes do you need to make? How significant are they? How far is your engagement strategy from where it needs to be in the future?
3. Build the business case:
Gather evidence on the megatrends and the changes they will demand. Make clear how your employee value proposition needs to change. Use this to push the future of engagement, and the necessary changes, up the corporate agenda. Put the case in business terms: highlight where your organization is struggling and the role engagement will play in addressing problems.
4. Find allies:
Build networks internally with the right people in the right functions to help you to make change happen – for example, HR, recruitment, learning and development, internal communications and CSR. Create a taskforce of key people who can work together to make change happen.
5. Keep in touch:
Gather views throughout the employee lifecycle, in order to understand how engagement and its drivers are evolving in light of the megatrends.
(Hay Group, 2014)
Ways to Motivate Employees:
- Set Smaller Weekly Goals
- Give Your Employees Purpose
- Radiate Positivity
- Motivate Individuals Rather Than the Team
- Learn What Makes Each Employee Tick
- Reward Based on Feedback
- Prioritize Work-Life Balance
- Have an Open-Door Policy when it comes to suggestions and ideas
- Let Them Lead/ Allow them to take ownership
- Create Recognition Rituals
- Trust them with challenges
- Give good feedback
- Help them learn new skills
- Play to their interests
- Give them job security
- Let them have their space
- Stock Options
- Pay Bonuses
- Time Off
- Education Investment
(Gomez-Mejia, Balkin and Cardy, 2016)
Total Rewards and Employee Engagement examples:
Boston Consulting Group:
BCG invests “100-plus hours and thousands of dollars to recruit each consultant,” says the company’s site, and it also claims to pay 100 percent of its employees’ health care premiums.
“Attracting top talent and maintaining an environment in which employees can rapidly develop have been key to our success and our ability to deliver enormous value to clients. Recognitions like this are a nice acknowledgment that our efforts are highly unusual and, based on our growth and client retention, effective,” says Rich Lesser, BCG’s chairman of North and South America.
SAS has ranked in Fortune’s Top 100 for 14 consecutive years, according to the company’s web site.
The company says that “if you treat employees as if they make a difference, they will make a difference.” SAS employee rewards includes subsidized Montessori child care, unlimited sick days, a free health care center, and intramural sports teams.
CEO Jim Goodnight says that “[we create] a culture that rewards innovation, encourages employees to try new things and yet doesn’t penalize them for taking chances, and a culture that cares about employees’ personal and professional growth.”
- businessinsider, Melissa Stanger and Aimee Groth, Oct. 13, 2012, 23 Companies With Employee Perks That Will Make You Jealous, https://www.businessinsider.com/companies-with-awesome-perks-2012-10?r=US&IR=T Accessed 25.2.2019.
- custominsight, What is Employee Engagement?, https://www.custominsight.com/employee-engagement-survey/what-is-employee-engagement.asp Accessed 25.2.2019.
- Forbes, Kevin Kruse, 22.7.2012, What is Employee Engagement, https://www.forbes.com/sites/kevinkruse/2012/06/22/employee-engagement-what-and-why/#7a5a5b227f37 Accessed 25.2.2019.
- Forbes, Mike Kappel 04.01.2018, How To Establish A Culture Of Employee Engagement, https://www.forbes.com/sites/mikekappel/2018/01/04/how-to-establish-a-culture-of-employee-engagement/#345a0c538dc4 Accessed 25.2.2019.
- Gomez-Mejia, L.R., Balkin, D.B. and Cardy, R.L. 2016. Managing Human Resources. Global Edition 8/E. Pearson. London Accessed 25.2.2019.
- Hay Group, 2014, The new rules of employee engagement, http://f.datasrvr.com/fr1/414/25154/Hay_Group_New_Rules_of_Engagement_Report.pdf Accessed 25.2.2019.
- helioshr, 11.2013, What Makes Up A Great Total Employee Rewards Package?, https://www.helioshr.com/2013/11/what-makes-up-a-great-total-rewards-package Accessed 25.2.2019.
- tedsummaries, 06.06.2014, DAN PINK: THE PUZZLE OF MOTIVATION, https://tedsummaries.com/2014/06/06/dan-pink-the-puzzle-of-motivation Accessed 25.2.2019.