Engaging Minds and Hearts- The unfulfilled ‘transparent organization’ dream

This blog post has been written by Amer Haleem, Country Manager, Productized Services, Hay Group India

The global business environment is evolving at an extremely rapid pace. Yes, you knew that already. So, you’d probably also be aware of the megatrends that are causing this change and ways for businesses to deal with them. Hmm. Now, I can picture a few blank expressions.

We all know that the world is changing. But, what requires focus are the six powerful megatrends that are transforming the global business environment- especially if we want to keep up with this change and use it to optimize our growth. Here, I hope to provide you with a little insight on that.

The big challenge

First up, the biggest overall challenge. Achieving and maintaining engagement. Over the years, Hay Group’s in-depth analysis has already established that business success does depend on an engaged and enabled workforce. The organizations, which focus on this factor, achieve 4.5 times the revenue growth of those organizations that pay no attention to engagement and enablement. Now, there is little doubt that every organization would want to aim for that sort of growth. This is why we now see CEOs prioritizing engagement. However, in the present scenario, achieving and maintaining engagement is a very big challenge.

The megatrends- what makes them important

Now, to meet this challenge to keep your workforce engaged, you have to be mindful of the megatrends that I spoke of earlier. I am stressing on the significance of these megatrends, as they are fundamentally changing how people work, and what they want from their employer.

To get to the facts straight, our new research identifies five key challenges that companies face to sustain performance now and in the future. Companies are failing to put the right people strategies in place to meet critical business challenges and our data from over five million employees globally, suggests that these are the five key challenges that businesses will be facing over the next fifteen years:-

  • Collaboration
  • Agility
  • Transparency
  • Innovation
  • Productivity

Oh, another big revelation- overcoming all of these challenges will depend on an engaged and enabled workforce.

As the engagement game changes, what can you do to keep up? With these emerging megatrends, companies need to re strategize, to ensure that valuable talent does not walk away.  Here, I will focus solely on the “transparency” megatrend and help you stride through this one with ease.

The transparency challenge

Presently, digital technology has fostered a climate of transparency. Not only can businesses be held to account more easily, social media has made it easier for people to promote their skills and find new jobs.  Organizations therefore need to be open and honest about how they reward, manage and develop their people. However, our research shows a dangerous lack of clarity around reward and development. Less than half of employees (45%) feel that there is a clear and transparent connection between their performance and their pay, and 43% feel that better performance won’t lead to opportunities to progress.

Clearly, every employees’ dream of ‘the transparent organization’ is a stark contrast to reality. So, here are some things that you can do to keep up with your workforce’s expectation:-

  • Assign responsibility for transparency
  • Work with reward colleagues to compare your pay scales
  • Develop a clear reward proposition
  • Create career paths that allow people to reach their potential
  • Review your performance management framework
  • Use your employee survey
  • Monitor external forums in addition to internal sources like the employee survey
  • Establish and monitor real-time, internal feedback channels
  • Assess your leaders’ internal communications

It’s no easy task to put all of these measures in place. But, since this is one of the key challenges of the future- the right time to start is now!

To know more about these key megatrends and ways to deal with them, download our new e-report- Engaging Hearts and Minds. 

Get our e-Report Now >>


The science of employee engagement

We’ve all heard that joke about the CEO who was asked how many people worked in his organization. “Oh, about half of them,” he replied. But jokes apart, measuring how engaged your staff really is with your organization, could make for frightening reading today. Recent research conducted by Hay Group has found that just about two-thirds of employees worldwide are engaged at the workplace. Further, our study found that an average of 33 per cent of employees are unable to perform optimally, admitting that barriers put in place by the organization are preventing them from excelling at work. These are startling figures indeed.

On the brighter side, all of our research shows that employees want to work and they want to work hard; it is what human beings naturally want to do. Given that the vast majority of us want to work, what then is the driving force behind those who want to work in the same direction as the employer and those that don’t?

The science of measuring and following up on employee engagement (the measure of enthusiasm and alignment to organizational goals) has come a long way in the past three decades. Years of global research with many millions of employees of all levels and demographic groups has given Hay Group a pretty definitive understanding of what really drives people to come to work and to work effectively.  A well aligned workforce results in better bottom-line performance. It delivers higher scores on pretty much any business critical key performance indicators you care to mention, whether they be profit, innovation, safety or anything else. It also means comparatively better share performance.

Clearly, these days, more than ever, employee engagement must be part of any company’s key performance indicators and should be tied into decisions that affect return on investment.

What is worrying then, is that at a time when global companies are looking to deliver increasingly better performance, we are seeing employee engagement across the world decline or stagnate at 2008 levels. Our study on Engagement, that spanned 1610 organizations across 46 countries, represents the views of almost five million employees – and a great number amongst them are unwilling and unable to go the extra mile for their organization. With global engagement scores pegged at 66 per cent, we have found that employers in India are only marginally better off with 68 per cent of engaged employees.

This unique study also showed that employees across the globe are not properly supported at work – and are unable to perform to their full potential as a result. Less than two thirds of employees around the world (62 per cent) feel that conditions at work allow them to be as productive as they could be. Clearly, there is a stubborn gap between the level of discretionary effort that employees globally are willing to put into their work and the corresponding level of support available to enable them to excel. For organizations looking to harness the full productivity of their workforce, leaving this pool of motivation untapped is a wasted opportunity. Employees based in India are slightly better off in terms of employee enablement; however, more than a quarter admit that they could be more effective, if workplace conditions allow for greater productivity.

Our experience shows that to truly drive productivity, business leaders must understand the role they have to play in enabling high levels of performance – removing the barriers that are holding their employees and their organizations back. This ability of engaged individuals to make maximum contributions has two key components. The first, personal utilization, requires that employees are effectively matched to their roles, such that their skills and abilities are put to best use. The second component, an enabling environment, involves structuring work arrangements such that they facilitate, rather than hinder, individual productivity.

Even so, company loyalty is another metric that has taken a hit in these tough times, with commitment levels falling to a five-year low in every major region. More than two-fifths (44 per cent) of the global workforce has expressed their intent to leave their present employers within five years, with more than one in five employees (21 per cent) amongst these intending to leave within two years! A much larger majority of employees in India (58 per cent) have acknowledged their intent to exit their present organizations within the next years, with about one in every three planning this shift within two years. It is a worrying sign that Indian organizations, despite averaging higher engagement levels than the Asia average, find that only about 40 per cent intend to remain loyal to their present organizations in the next five years. Frustrated employees are unlikely to persist over the long-term in this state. Clearly, the opportunities currently available for organizations to improve the bottom line by actively engaging the workforce have never been so good – and the time to act is now.

More than ever, the benefits of real engagement are being recognized. Even minor improvements in employee engagement see measurable, often significant, improvements in business outcomes. In turbulent times, a highly engaged workforce dramatically improves the chance of weathering the storm – it is a real differentiator between winners and losers at such times.

The share performance curve of organizations with highly engaged employees is generally smoother and generally moves in an upward direction, compared to that of organizations with poor engagement levels, our research shows. In other words, market forces have less of an effect on high engagement environments. Investors are increasingly seeing the link between engagement and business outcomes. Engagement is a great predictor of future financial performance. In fact, our work on The Enemy of Engagement found that organizations in the top quartile on employee engagement demonstrate revenue growth 2.5 times that of those in the bottom quartile; even as companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater.

Despite the numbers, getting engaged performance is not just about investing financially in employees through perks or pay hikes. It is about striking a new contract in which the organization invests emotionally in its workforce. In exchange, employees make a similar emotional investment, pouring their “discretionary effort” into their work and delivering superior performance. The new contract says, “We’ll make your job (and life) more meaningful. You give us your hearts and minds.”

Engagement (and enablement) is about motivating employees to perform at their best by providing necessary resources and support. Managers must combine engagement (the use of motivational tools), with enablement (the act of providing employees with effective resources), in order to reach optimal levels of employee satisfaction and productivity. They must listen carefully to their teams for common frustration themes, and address them by prioritizing goals, advocating for resources and minimizing workflow disruptions. They must provide adequate training, support, and discretion to grow—and not hold employees back with excessive procedures, decision processes, lack of resources and overly narrow roles. Evidently, the need of the hour is for organizations and managers to create sustainable long-term strategies to better enable their employees; in effect equipping them for the organization’s success.

Read more about keeping your workforce switched on in our Employee Engagement e-report,

Employee frustration: The bane of workplace productivity

Workplace frustration is a silent epidemic creeping through organizations, yet it is rarely confronted or even recognized. Frustration wears down motivated, dedicated employees who really care about their jobs but can’t get the organizational support they need to get things done. Focused on making contributions, these employees often hide their frustration, leaving managers in the dark about their discontent.

Just as the epic Batman movie finds the masked superhero struggling to hold his own against Bane, his sinister nemesis; there is a silent bane to productivity lurking in our workplaces – frustration. While many organizations proclaim that people are their most important asset, a good many fail to act as though they really believe it.  But that doesn’t make it any less true that talented and engaged employees can provide the most sustainable source of differentiation; a competitive advantage that competitors simply cannot replicate.

Though frameworks for understanding employee engagement vary, it commonly looks to capture levels of commitment and discretionary effort demonstrated by employees. Simply put, engaged employees are more likely to be willing to go above and beyond formal job requirements (the ‘discretionary’ effort), make for better organizational citizens, and devote greater effort and ownership towards their work.

Despite the plain stating, this remains a challenging issue for organizations to address. In a climate where they are straining to do more with less, organizations cannot afford to squander the energy of engaged and motivated employees. Tapping into the discretionary effort of engaged employees has become all the more imperative given today’s business outlook. The ever-increasing pace of change in modern organizations calls for employees at all levels to be able to face unanticipated and ambiguous business conditions. In this case, organizations that are able to get engagement right can count on their employees to act in ways that are consistent with the organizational objectives, given the employees’ alignment with organizational values and standards. Finally, the relevance of engagement comes from employees themselves, who today are in charge of their own work paths and the definition of career success. More and more employees are looking for environments where they can be engaged and contribute to the larger picture.

Here is the catch. Many companies enjoy high levels of engagement, yet still struggle in terms of performance.  Unfortunately, high employee engagement alone does not guarantee an organization’s effectiveness. You also need real employee enablement – developing systems that provide for better support for the success of employees. Hay Group’s research suggests that frustrated employees represent a significant lost opportunity for organizations – individuals who are aligned with corporate goals and energized about making a difference, yet are held back by roles that do not fully leverage their skills, or by work environments that are not supportive or create barriers in the way of accomplishing their work.

From a motivational perspective, leaders have these employees right where they want them. But when it comes to allowing them to be as productive as they can be, leaders are missing out. The truth is, frustrated employees are unlikely to persist over the long-term in this state, no matter how motivated they are. Engaged employees need to have the confidence that the organization is doing all it can to promote their success, rather than having to worry about obstacles in the form of non-essential tasks or procedural red tape.

An ‘enabled’ work environment essentially points to two do’s. The first, optimized roles, allows employees to be effectively aligned to their job roles, such that their skills and abilities are being put to good use. The second relates to a supportive environment, where work arrangements are structured in a way to facilitate, rather than hinder, individual productivity. For true enablement, employees must have all essential resources at hand that are required to get a job done – information, technology, tools and equipment, and financial resources.

Effectiveness, when implied as a result of ‘engagement’ and ‘enablement’, has proven to impact the bottom line. Our research with hundreds of companies shows that organizations in the top quartile on engagement exhibit revenue growth 2.5 times more than those in the bottom quartile; but the companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater! Companies with high engagement levels also demonstrate 40 per cent lower turnover rates than those with low engagement; but those that both engage and enable employees display a 54 per cent reduction in voluntary turnover rates. Clearly, this shows just how central employee engagement can be to an organization’s success when combined with appropriate levels of employee enablement.

How can your organization listen for signs of employee frustration? You can ensure you are doing the best possible job of enabling your employees with the following in mind:

  1. Managers must combine engagement (the use of motivational tools), with enablement (the act of providing employees with effective resources), in order to reach optimal levels of employee satisfaction and productivity.
  2. Managers must listen carefully to their teams for common frustration themes, and address them by prioritizing goals, advocating for resources and minimizing workflow disruptions.
  3. Organizations with supportive environments limit the extent to which work tasks ‘crowd out’ personal time by permitting employees to complete the most vital tasks as efficiently as possible. Employees are likely to feel better about staying late or coming in early if they are working on tasks with a clear purpose and are given the authority necessary to make decisions about how best to accomplish their objectives.
  4. Instead of waiting for the annual review to discuss performance, managers should create a culture of dialogue about goals, priorities and challenges throughout the year.
  5. Organizations must provide adequate training, support, and discretion to grow—and not hold employees back with excessive procedures, decision processes, lack of resources and overly narrow roles.
  6. Conflict between the operational goals of different departments often diminishes cooperation. To fix this, interdepartmental communication must be strengthened by sharing both people and information.
  7. Managers need to identify where individual goals are competing with shared goals and must work to eliminate, or at least minimize these obstacles.

Read more about keeping your workforce switched on in our Employee Engagement e-report,