Complete Part 1-4 worksheet

Assess Your Organization (or Work Group)

"Improving engagement — finding ways to encourage individuals to invest more psychic energy in work — is the single most powerful lever that corporations have to improve productivity" — author Tamara Erickson, testifying before the U.S. Congress.

 In this module, you will identify helpful management strategies that you think are most appropriate for implementation in your workplace. You will focus here on an organizational assessment, surveying a work group regarding engagement, and develop your own hypotheses about reasons for suboptimal engagement as you identify possible solutions. You will also hear from Professor Nishii about the engagement readiness of leaders and how you can coach managers to further influence engagement levers. You will also examine the data that shows engagement's measurable impact on cash flow, turnover, and shareholder value. 

Student note: The required coursework includes conducting a simple survey of some members of your work group. It is recommended that you make plans now to engage your colleagues in that survey.

What the Data Says

Key Points

Data shows how engagement has a measurable impact on cash flow, turnover, and shareholder value.

Return on assets and profitability are higher when engagement is higher.

Let's examine what the data says about what engagement means to organizations in terms of bottom-line impact: turnover, cash flow, profitability, and ultimately shareholder value. According to research, in an organization of 10,000 employees, moving the workforce from low to high engagement can have an impact of over $42 million.

The charts shown here illustrate the firm-level returns on engagement. One study showed that firms with engagement scores in the top 25% benefit from higher returns on assets and profitability (approximately 7%) compared to firms with engagement scores in the bottom 25%.

Notice that, as shown in these illustrations, return on assets and profitability are higher when engagement is higher, and this is true for three primary reasons:

· Employees are more dedicated to creating value for the company.

· Employees are more consistent in their interactions with customers and other stakeholders.

· Employees are less likely to leave the organization.

These factors, in turn, impact cash flow and, ultimately, shareholder value.

* Analyses involve Engagement data from 1,500 companies (Hewitt)

If you compare companies within this range, those with 60-70% of engaged employees versus 50-60% of employees (that’s only a decile different), you see that shareholder return is considerably higher in the companies that have just 10% more of their employees engaged. 

Not surprisingly, you see a similar pattern when you look at turnover; turnover rates are significantly higher in teams and organizations where employees report low or even just average engagement scores.

Interpreting the Data

As you gather data and look across the work groups to find out how engaged employees actually are and where there might be room for improvement, there is one caveat from Professor Nishii: Don't rush in to provide solutions before you understand the root causes of the data. It's important that as you examine engagement within an organization or work group, you ask questions to try to discover why the results are what they are.

Okay, so now I'd like to talk a little bit about how to interpret engagement data. Assuming that you have some engagement data available to you, and you want to try to understand ways in which engagement can be improved within your organization, one of the most important things to remember is that you need to ask why the results are why they are. That seems obvious. But sometimes people rush in to creating solutions, before they spend enough time diagnosing what their root problem actually is. So don't jump to conclusions prematurely. And ask for examples of personal stories from people working in the organization to make the results either more meaningful and compelling. And you can ask a variety of different questions about the engagement data that you're looking at. But here are some to get you started. So what's the problem? For which employee sub-group do you think there is a problem? Don't assume that a particular issue applies to all employees within the organization. Identify the sub-group for which you think there might be a particular issue. What evidence do you have that there might be a problem with one of the drivers, for example, of engagement? Do you need more evidence to confirm this? Maybe you have a hunch, but you need more data, more evidence to see whether or not your hunch is actually true. What are the hypotheses that you have about what may be the root cause of the engagement scores that you're seeing? What kind of formal, informal evidence would you need in order to test your hypotheses? Here is a set of steps that you can see in this graphic. Steps that you can take in interpreting data and using that for action. So, the best way to think about this is to try to begin by identifying specific, kind of narrowly defined issues related to engagement. Don't try to change the whole culture at once or solve all the problems at once. But focus on specific issues. And then identify what I call a diagonal slice of relevant employees. So earlier I talked about, for which subgroup of employees is this issue relevant. It may be that it's just people in a particular work group. But if it's an issue related, for example, to women within the workforce, then it's best to take this diagonal slice across hierarchical levels and across different job types and functions, so that you can see whether or not the issues relate to people across these different roles and levels. Once you put together a group, then start your kind of deeper diagnosis. Ask questions. Talk to them. Refer to published research for ideas. Try to formulate these hypotheses more clearly with the help of these individuals within the group that you've put together. And then begin to brainstorm possible solutions. Identify possible obstacles that might exist to the solutions that you've come up with. And then, once you've done that, start to think about your kind of immediate short term, and then medium term, and long term actions and goals that you have, for addressing the problems that you have identified. And then, don't forget to assign accountability for this solution that you've identified. Assign this accountability to a collective group, as well as to a single owner, single individuals should own the problem and the solution. And then you want to keep senior leaders updated on the progress that's being made against these goals that have been set.