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Measuring employee engagement, and the consultants view

Stephen Gourlay

& Ann Brown

Agenda for today

Measuring engagement – spoilt for choice, or a dilemma?

Measurement – some key principles

Scales & Scale development processes

Engagement surveys

A consultant’s view - moving from engagement to experience

Measuring “engagement”: Choices!

Derived from Kahn’s work

May et al 2004

Saks 2006

Rich et al 2010

Burnout group researchers

Maslach Burnout Inventory (MBI)

Oldenberg Burnout Inventory (OLBI)

Utrecht Work Engagement Scale (UWES)

Gallup Q12

But is it a measure of employee engagement?

Aon Hewitt’s Say, Stay Strive ‘model’

And other approaches …

You are spoiled for choice!

So you want to measure ‘engagement’?

Which measure are you going to choose?

Is it good that you have a lot of measures to choose from?

Is there a best measure?

How will you decide which measure to use?

As there are a lot of measures offered by consultancies and researchers HR practitioners (and researchers) have to make some choices. But what are good grounds for choosing one measure over another? There are both practical and theoretical reasons, and balances to be made between precision and accuracy on the one hand, and convenience on the other.

When we measure something – what do we measure?

Length of a table

Height of a person

Weight of a book

Brightness of a light

Degree of an employee’s satisfaction with their job

i.e we measure attributes of people and things

What do we measure?

We measure attributes of things

Attributes – qualities, aspects, features, dimensions, variables …

We don’t measure ‘a person’ but a person’s height, weight, productivity … level of “personal engagement” or “work engagement” etc.

How do we measure attributes?

The length of a table?

The height of a person?

The weight of a book?

The brightness of light?

The level of job satisfaction?

(NB the answer is NOT - with a survey)

“metrics” seems to be used to mean ‘scale’ or set of questions

So what’s involved in measuring?

Agreement on the attribute being measured (definitions)

Agreed standard units

Agreement on the measurement process

The act of measuring

Measurement: “the assignment of numerals to objects or events according to rule” (Stevens, in Michell 2000, p. 650)

How are these similar (or different) to measure

Manifest variable

Latent variables

Personal engagement

Job satisfaction

Income

Height

Job involvement

Organizational commitment

Absence rates

Performance

Qualifications

Turnover

Turnover intention

Intangible (latent) variables

Personal engagement

Work engagement

Job engagement

Organizational commitment

Job satisfaction

Etc. etc. etc.

Need to be operationalized (made observable)

Operationalization

Defining a concept in order to make its dimensions manifest

Utrecht Work Engagement Scale

“work engagement”

Vigour, dedication, absorption

“vigour”

Feeling energetic

Feeling strong, vigorous

Feeling like going to work in the morning

Etc.

Scale development steps

Scale development steps - details

What do you want to measure?

Defining the concept

Defining the level of specificity

E.g. work engagement in general vs very short term work engagement

Ensuring the concept is distinct

Specifying overlap with other concepts

I.e. establish construct validity

Generate item pool

Items – the list of ways that might measure the concept

Ensure they reflect the purpose

Initially many items (reduce later)

Ensure time-frame is sufficiently explicit

Include positively and negatively worded items

Establishing content validity.

Choose the measurement format

Measurement format

Usually Likert scales are used

Ask experts to review the items

Decide whether or not to include validation items

e.g. reverse score some questions

The UWES scale?

Reverse scoring questions – have some questions phrased positively, and some negatively, that measure the same thing. Then if people respond inconsistently you know there is a problem with their responses. No examples in engagement questionnaires.

E.g. the organizational commitment questionnaire:

“6. I am proud to tell others that I am part of this organization.

7. I could just as well he working for a different organization as long as the type of work was similar. ( R)” (Mowday et al 1979, p. 228). These were the statements for Likert scale responses. (R) indicates the researchers would ‘reverse’ the response to question 7 – and would expect it to be consistent with question 6.

Test (and test, and test …)

Test items with a development sample

Ensure it is sufficiently representative

Evaluate the items

Reliability coefficient alpha (Cronbach’s alpha)

Inter-item correlation coefficient

0.70 – rule of thumb

… and finally!

Optimize scale length

Short scales

Lower respondent fatigue

Lower reliability

Long scales

Higher respondent fatigue

More respondent errors

Higher reliability

3 versions for the UWES scale: 3 items (very short version) 9 items (short version) – 17 items (long version)

Let’s talk about employee surveys; tried and trusted, or over-used?

Being practical - 5 factors of success:

Concrete objectives – be clear on what you are measuring and why?

Accountability – who is responsible for acting on the results?

Specificity – be clear in asking questions, test your questions in focus groups

Transparency - communicate objectives, anonymity, data management, results analysis and action planning

Triangulation – cross reference different types of data to make sure what you are being told is verifiable, look at Glassdoor, business results, town hall meetings, exit data, benchmarks, previous survey results. What message are you getting?

What are the consultants saying?

Korn Ferry – measure more frequently, pulse, analytics, engagement is highly variable and in world of fast satisfaction / dissatisfaction annual surveys need to be supplemented.

Towers Willis Watson – engagement is now inextricably aligned with the employee experience.

Sustainable Engagement and EX

Willis Towers Watson

01 August 2019

A modern measure of engagement – ‘Sustainable Engagement’

Rational, emotional and behavioural attachment to the company

A local work environment that supports productivity and performance

Individual physical, interpersonal and emotional well-being at work

Engaged

Energised

Enabled

41%

lower retention risk

6.5

fewer days lost

higher operating margin

Employee Engagement – connection to business performance

Companies with low Engagement

Companies with high Engagement

Companies with Sustainable Engagement

9.9

14.3

27.4

Operating Margin

3x higher

How we measure Sustainable Engagement

Engaged

Enabled

Energized

I would recommend [Company] as a good place to work

I work beyond what is required to help [Company] succeed

My department is able to meet our work challenges effectively

There are no substantial obstacles at work to doing my job well

I am able to sustain the level of energy I need throughout the work day

My work gives me a sense of personal accomplishment

What drives Sustainable Engagement in your company?

Engaged

Enabled

Energized

Wellbeing

Goals & Objectives

Workload

Efficiency

Customer Focus

Change

Innovation

Collaboration

Safety

Learning

Image

Empowerment

Training

Flexibility

Strategy

Ethics

Compliance

Performance Management

Career Development

Competitiveness

Teamwork

Values

Communication

Benefits

Inclusion

Digitization

Diversity

Quality

Supervision

Rewards

Leadership

WORK

TOTAL REWARDS

PEOPLE

Talent Value Proposition

The framework; what you offer the people who work for you and the behaviours you expect in return

BUILD

ENGAGE

The Lifecycle

Where and when; the moments that matter and touchpoints where the EX lives

HIRE

LEAD

Employer Brand

How people see, hear and feel the work experiences you offer as an organization

EMPLOYER

BRANDING

Purpose

At the heart of EX sits the meaning of work, for the business, your people and your customers

PURPOSE

People Strategy

How you prioritise and deliver the EX for people

STRATEGY

PEOPLE

Culture & Values

The environment of your EX, your values and ways of working that define who you are

CULTURE

VALUES

PURPOSE

WORK

TOTAL REWARDS

PEOPLE

Employee Experience

Business & People

Customer Experience

Business Performance

Outcomes

Strategy

Understand it and then shape it to gain a competitive advantage

When their overall experience at work is great, employees strive to delight customers and give their best

There are 4 dimensions of employee experience The fundamentals of what employees are looking for in all organisations

A strong sense of purpose

Connection with great people and leaders

Doing great work in a thriving organisation

Individual growth and reward opportunities in return

EX Employee

Experience

The Willis Towers Watson Human Capital Framework

High Performance Employee Experience predicts better financials

Analysis of Employee Experience Index vs. financial performance in 120 global organisations

* Source: Willis Towers Watson Normative database

Comparison vs. Sector average

Poor Employee Experience

Return on Assets Return on Equity Gross Profit Margin 3-Year Revenue Growth 3-Year Change in Gross Profit Margin -5.548E-3 -5.6356999999999997E-2 5.0070000000000003E-2 -1.3846000000000001E-2 -3.4783000000000001E-2 Average Employee Experience

Return on Assets Return on Equity Gross Profit Margin 3-Year Revenue Growth 3-Year Change in Gross Profit Margin 5.3600000000000002E-3 8.5220000000000001E-3 8.5074999999999998E-2 9.6530000000000001E-3 2.3E-3 High Performance Employee Experience

Return on Assets Return on Equity Gross Profit Margin 3-Year Revenue Growth 3-Year Change in Gross Profit Margin 1.8556E-2 3.1147000000000001E-2 0.11575000000000001 3.5000000000000003E-2 4.3320999999999998E-2

Inspiration

“I’m totally inspired by what we do”

Drive

“We’re transforming, agile & ahead of the market”

Growth

“I’m achieving my potential”

Trust

“I trust leadership & they trust us”

Inclusion

“I really fit in here, and we respect human differences”

Voice

“I have a say in what we do”

Capability

“I’m developing my capabilities”

Collaboration

“We help each other, and work across boundaries”

Understanding

“I get it”

Organization

“We’re efficient, flexible, and continually improving”

Purpose

Work

Reward

People

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Fair Pay

“I’m rewarded fairly for my performance”

Support

“I feel supported, and have a good boss”

Dimensions

Levels

Systems and processes to support work

High risk if you get these wrong

Mindset needed to succeed

How to create personal agency

Employee Experience Survey

Built on 4 dimensions x 3 levels

Global High Performance Companies have impressive and sustainable performance*

Stock performance of GHP companies vs. Dow Jones and S&P Indexes

Return on $1,000 investment

* Willis Towers Watson Global High Performing Companies Norm

S & P 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 810.57 1101.02 1209.78 1030 1170.28 1219.78 750.29 948.81 1042.83 1199.8800000000001 1360.66 1763.41 2001 1986.4 2181 2377 Dow Jones 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 856.16 1146.1300000000001 1184.02 994 1156.02 1239.71 820.45 974.68 1066.1099999999999 1183.5999999999999 1269.53 1605.95 1727 1688.4 1917 2573 GHP Group 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 934.42 1203.3699999999999 1583.17 1131.9000000000001 1387.9 1487.9 1657.8 2201.88 2603.06 3079.42 3089.28 4069.81 5080 6229 7180 8759

There are 3 levels of employee experience

Based on the extent to which they are hallmarks of high performance companies

Based on employee survey data from 500 companies, and nearly 10 million employees

Excellence

Emphasis

Essentials

Purpose

Work

People

Total Reward

Work

Purpose

Total Reward

People

Work

Purpose

Total Reward

EX in High Performance Companies vs global average

Basics all companies do reasonably well and which don’t especially differentiate high performance

Areas where only a few high performance companies excel

Areas where some companies begin to pull away from the global average

Survey Category

Inspiration Drive Trust Growth Market Focus Voice Inclusion Capability Collaboration Support Organised Work Organised Structure Understanding Fair Pay 13 11 10 10 9 7 6 6 5 4 4 2 2 2

High Performance Employee Experience Survey

Built on 4 dimensions x 3 levels

Inspiration

“I’m totally inspired by what we do”

Drive

“We’re transforming, agile & ahead of the market”

Growth

“I’m achieving my potential”

Trust

“I trust leadership & they trust us”

Inclusion

“I really fit in here, and we respect human differences”

Voice

“I have a say in what we do”

Capability

“I’m developing my capabilities”

Collaboration

“We help each other, and work across boundaries”

Understanding

“I get it”

Organization

“We’re efficient, flexible, and continually improving”

Purpose

Work

Reward

People

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Fair Pay

“I’m rewarded fairly for my performance”

Support

“I feel supported, and have a good boss”

Dimensions

Levels

Systems and processes to support work

High risk if you get these wrong

Mindset needed to succeed

How to create personal agency

HALLMARKS OF EXCELLENCE

The experiences that define high performing companies

INSPIRATION

Strong belief in the company mission & strategy

Strong belief in products & services

Clear vision of the future

TRUST

Culture of respect & fair treatment

Management decisions highly values driven

Confidence in leadership decisions

DRIVE

Ahead of the market, agile & innovative

Drive to improve customer experience

Master of change management

GROWTH

Great development & growth opportunities

Fair promotions

Can maximise career potential

willistowerswatson.com

Examples of reporting back results of the HPEX diagnostic

= Average of the 34 EX items

High Performance EX Index

EI Index fav unfav + mid 75 25

Hallmarks of excellence dashboard These are the factors which most differentiate high performing companies

GROWTH

Great development & growth opportunities

Fair promotions

Can maximise career potential

INSPIRATION

Strong belief in the company mission & strategy

Strong belief in products & services

Clear vision of the future

Trend GFS GHP

 ▲ ▼

 ▲ ▲

  ▼

 ▲ ▲

 ▲ ▼

TRUST

Culture of respect & fair treatment

Management decisions are highly values driven

Confidence in leadership decisions

 ▲ ▲

  ▼

 ▼ ▼

Trend GFS GHP

DRIVE

Ahead of the market, agile & innovative

Ceaseless drive to improve customer experience

Master of change management

 ▲ ▼

  ▼

 ▼ ▼

Trend GFS GHP

  ▼

Example client scorecards

High risk start up

Going to change the world, fantastic product, but low trust and lack of professionalism

Purpose

Reward

People

Work

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Inspiration

Drive

Growth

Trust

Inclusion

Voice

Capability

Collaboration

Understanding

Organization

Fair Pay

Support

willistowerswatson.com

POOR EX

Purpose

Reward

People

Work

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Inspiration

Drive

Growth

Trust

Inclusion

Voice

Capability

Collaboration

Understanding

Organization

Fair Pay

Support

willistowerswatson.com

AVERAGE EX

Purpose

Reward

People

Work

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Inspiration

Drive

Growth

Trust

Inclusion

Voice

Capability

Collaboration

Understanding

Organization

Fair Pay

Support

willistowerswatson.com

High Performance EX

Purpose

Reward

People

Work

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

Inspiration

Drive

Growth

Trust

Inclusion

Voice

Capability

Collaboration

Understanding

Organization

Fair Pay

Support

willistowerswatson.com

Sector Scorecard: Financial Services

Based on 150 companies, and 1.25 million employees, in the financial services sector

Inspiration

Drive

Growth

Trust

Inclusion

Voice

Capability

Collaboration

Understanding

Organization

Fair Pay

Support

Purpose

Reward

People

Work

Essentials

Emphasis

Excellence

Basics all companies need to get right

How to excel

How to get ahead

willistowerswatson.com

References

DeVellis, Robert F. (2012) Scale Development: Theory and Applications. Vol. 26. Applied social Research Methods Series, London: Sage.

Flatten, T. C., Engelen, A., Zahra, S. A., & Brettel, M. (2011). A measure of absorptive capacity: Scale development and validation. European Management Journal, 29(2), 98-116.

Guest, D., 2014. Employee engagement: a sceptical analysis. Journal of Organizational Effectiveness: People and Performance, 1(2), pp.141-156.

Jeung, C.W., 2011. The concept of employee engagement: A comprehensive review from a positive organizational behavior perspective. Performance Improvement Quarterly, 24(2), pp.49-69.

Jimenez-Jimenez, D. & Sanz-Valle, R., 2012. Studying the effect of HRM practices on the knowledge management process. Personnel Review, 42(1), pp.28–49.

Little, B. and Little, P., 2006. Employee engagement: Conceptual issues. Journal of Organizational Culture, Communications and Conflict, 10(1), pp.111-120.

Michell, J., 2000. Normal science, pathological science and psychometrics. Theory and Psychology, 10(5), pp.639–668.

Mowday, R.T., Steers, R.M. & Porter, L.W., 1979. The measurement of organizational commitment. Journal of vocational behavior, 14(2), pp.224–247.

Saks, A.M., 2006. Antecedents and consequences of employee engagement. Journal of managerial psychology, 21(7), pp.600-619.

Schaufeli, W.B. and Bakker, A.B., 2010. Defining and measuring work engagement: Bringing clarity to the concept. Work engagement: A handbook of essential theory and research, 12, pp.10-24.

Schaufeli, W.B., Shimazu, A., Hakanen, J., Salanova, M. and De Witte, H., 2017. An Ultra-Short Measure for Work Engagement: The UWES-3 validation across five countries. European Journal of Psychological Assessment 35(4), 577-591

Stevens, S.S. (1946). On the theory of scales of measurement. Science, 103, 667–680. (republished many times after)