Rethinking HR's role in employee engagement

This article originally appeared in HR Executive

HR plays a key role in raising levels of engagement among employees—but it's not the role that most companies assign.

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The mismatch partly explains why many companies preach a gospel of high engagement yet struggle to realize the goal. Bain & Co. recently worked with survey consultancy Netsurvey to analyze responses from 200,000 employees across 40 companies in 60 countries and found several troubling trends, including:

  • Engagement scores decline with employee tenure, meaning that employees with the deepest knowledge of the company typically are the least engaged.
  • Scores decline at the lowest levels of the organization, suggesting that senior executives likely underestimate the discontent on the front lines.
  • Engagement levels run lowest among sales and service functions, where most interactions with customers occur.

Why do these problems persist? Senior executives tend to abdicate responsibility for engagement to corporate staff, usually HR. This delegation is misplaced, as HR is not in a position to take or direct the actions required to affect attitudes at the employee or team level.

Typically, HR groups rely on long, corporate-wide annual surveys and one-size-fits-all processes that focus on adherence. This centralized approach has innate problems that can actually lead to stagnant or declining engagement. Such surveys are too broad or infrequent to pick up important topical or team-specific issues. After the survey, senior management tends to push line supervisors to launch a burst of short-term initiatives. With HR leading the survey design, administration and interpretation, supervisors feel no ownership of the process. People stay primarily focused on managing some sort of engagement score, rather than having a thorough conversation about the issues raised in order to understand and address their root causes. A few months on, the effort trails off and behaviors revert to normal. It's no wonder that employees are left feeling "why bother filling out the survey?" when nothing of substance really changes.

Yet companies such as Rackspace, AT&T, Progressive Insurance, Intuit and Cintas have managed to raise engagement levels by doing things differently. While each of these companies has unique aspects to its approach, several themes set them apart.

Line supervisors, not HR, lead the charge.

It's difficult for employees to be truly engaged if they are not fans of their boss. Netsurvey's data show that 87 percent of employee "promoters" of their company also highly rate their direct supervisor.

That's why it's critical for supervisors to feel that team engagement is a high priority. At Rackspace, an IT hosting company, the mantra is "fanatical" customer support. To pull this off, Rackspace insists that supervisors talk often with their teams to solicit employee feedback, identify the root causes of their concerns, and then follow through with meaningful changes to how work gets done.

As a result, "Rackers" put in the discretionary effort that creates a superior experience for customers. In turn, customers reward Rackspace with intense loyalty that stands among the best in the industry—contributing to the company's 25 percent compound annual revenue growth and 48 percent profit growth since 2008.

With the supervisor acting as a catalyst to flush out workplace issues, teams can openly discuss what policies or informal rules impede their full engagement, and craft solutions together. Some obstacles go beyond a local team's control, such as overtime rates or benefit plans. But even those issues can be addressed by putting in place a reliable feedback loop that reaches the senior executives with authority to act and ensures they respond back to the teams.

As supervisors move to center stage, HR's role does not diminish, but it shifts. Rather than leading the survey analysis and development of initiatives, HR staff helps leaders at all levels become both accountable and empowered for getting at what is hindering engagement—rather than trying to do it for them.

Supervisors have the right preparation to hold candid dialogues with teams.

Working with a team to raise engagement doesn't come naturally to all supervisors, and it's a lot to ask of newly promoted supervisors. So engagement masters emphasize training on how to encourage honest, constructive discussions and how to handle tricky topics like requests for better pay or worries about outsourcing. The training also covers the importance of promptly taking the right actions and subsequently communicating back the outcomes to their teams.

HR can play an important role in tailoring the training for different functional leaders, along with carefully designing a "pulse check"—an online survey that's simple and short so as to avoid creating an IT or reporting bottleneck questionnaire process. From these anonymous responses, trained supervisors can see what issues need to be addressed during the dialogues.

We've found that the most effective training includes role-play and having expert line supervisors provide the training to their peers. It's useful to run pilots with different functions and departments ahead of any broad launch, to learn about any hot topics that may bubble up to the senior team and also to reveal where supervisors feel ill-equipped to lead the engagement charge.

The hottest issues may not be obvious to supervisors. In employee focus groups held for one of our clients, we asked supervisors what they thought the top concerns of their teams would be in an upcoming survey. Only one-quarter of the supervisors correctly identified the top concerns, despite their belief that they knew their teams well. They'd expected to see insufficient pay listed as a leading concern and were surprised to see, instead, that employees cited a desire for more training and more frequent appreciation—areas that supervisors thought were working well.

All the dialogues and surveys will go to waste unless a company puts in place a streamlined process for supervisors to escalate certain issues that the supervisors themselves cannot address. Employees and supervisor leaders must have confidence that their voices will be heard by the right executives or that an executive with sufficient authority will broker collaboration among several departments.

Teams rally ‘round the customer.

Call-center representatives, sales specialists, field technicians and others on the front line come to know intimately which aspects of the business annoy customers and which delight them. Engagement leaders regularly tap that knowledge by asking employees what the company could do to build the ranks of customer promoters, and listening hard to the answers. They ensure that the right people hear these concerns; if call-center representatives are hearing chronic customer complaints about pricing, that feedback goes to the group responsible for setting prices.

AT&T has embraced the concept. To handle the ideas from employees across all business units, the company has built a digital infrastructure allowing each suggestion to be logged online. A small, dedicated team promptly reads and triages the suggestions, sending each one to a designated leader or expert who is obligated to consider it and respond properly. An online tool allows all employees to see the progress of each suggestion and log comments to further clarify or collaborate.

Engagement tactics are tailored for different employee segments.

Just as companies divide their customer base into segments along demographic and behavioral lines, and court different segments with tailored offerings, the employee base has varied needs and each group will respond to different management motivational techniques.

The Netsurvey data, for instance, shows that for Millennial employees, having the opportunity to develop professionally is one of the most important drivers of engagement. Baby boomers care more about getting changes implemented and having an open work climate to express their ideas and opinions.

Engagement factors can also vary by culture. In the Protestant, non-English-speaking countries of Europe, the Netsurvey data shows that "workplace energy" and" belief in company management" are two attributes cited by respondents that correlate strongly with high engagement scores. In regions dominated by Confucian culture, the scores correlate most closely with "a workplace free from stress".

The lesson for multinational companies: Rather than exporting motivation techniques from the corporate center, teach managers how the priorities of each employee segment may differ from the average. And while some supervisors grasp these types of differences intuitively, others will benefit from basic training on how demographics, gender and culture often affect engagement. HR can play a crucial role here in helping to segment the employee base and to train supervisors and senior leaders in customizing engagement tactics to appeal to the individuals on their specific team.

It's all about the dialogue, not the metrics.

Managers who thrive on data sometimes obsess over benchmarking, ranking, and carrot-or-stick responses. Yet in fact, morale probably will erode if supervisors feel that nothing matters except the number, and they may take subtle steps to manipulate the scores.

Emphasizing the dialogues rather than the metrics demonstrates to supervisors that the senior team truly believes in the benefits of engagement. AT&T does not distribute pulse-check engagement scores to line supervisors or their bosses, choosing instead to show only the trends and verbatim feedback. The point is to signal that discussing and addressing the root causes, and seeing steady progress, matters more than any absolute score itself. Pushing the metrics to the side also sends a signal of empowerment to the supervisors.

Shifting from a survey-dominated, HR-led engagement approach to one that emphasizes supervisor-team dialogues does not mean that that HR heads will lose control of an important domain. Indeed, their new role is more valuable and strategic. They will spend less time directly responding to individual employee complaints, less time conducting stack rankings or distributing reports, and more time coaching leaders and designing targeted training for them.

They may, however, need to win over a chief financial officer who's skeptical of investing in additional support or training. To convince the CFO, one can usually find enough evidence inside an organization to link higher engagement to better commercial outcomes. Proof points might include how engagement correlates with higher sales, lower employee costs and more loyal customers who stay longer and spend more money. That's what it takes to make the link between engaged employees and improved economics for the business.

Jon Kaufman and Rob Markey are Bain & Co. partners based in New York.