Monday, January 7, 2013

Employee Engagement – For Change Managers

Employee Engagement continues to plummet.  It has hit an all time low at about 30%.  HR has been working hard at reversing this trend for almost a decade, but nothing seems to work.  Maybe it’s time that HR calls on Change Managers to design and implement a new paradigm for employee engagement?  

Let’s start at the beginning.  HR and managers have worked for years to destroy employee engagement.  This was not intentional or malicious; it was done in the name of eliminating “employee entitlement.”  Several decades ago the belief emerged that employers had provided such a strong economic safety net that employees were not hungry; they had lost their incentive to perform.  

Employees, it was believed, had become complacent because they could rely on: annual merit pay increases; employer paid benefits, particularly for health; and a defined benefit pension plan if they could just put in enough time to “meet the numbers.”  Comfort equaled sloth and that accumulated into a lack of business performance.

The simple answer to this initiating belief became the next belief.  According to the emerging paradigm: business needed to create a “performance culture” where those who performed to defined standards would be afforded commensurate rewards.  The employer was to give up vestiges of paternalism; it was time for employees to grow up and take responsibility for their careers.    

To implement these beliefs HR changed its role.  It took a lot of economic hygiene off the table and replaced it with: pay for performance topped up with metric driven bonuses; defined contribution pension plans where employees managed their investments for retirement; and paid-time-off plans along with cost sharing for health benefits.  The underlying philosophy, at the hygiene level, was clear: “we’re in this together, but you're on your own.”  This belief system was imbued into the depths of HR – as it transformed itself into a “strategic partner” with a seat at the executive table.

Unfortunately, what was perceived as “entitlement” had one major benefit.  It relieved employees of economic worry and let them focus on their work.  To the extent possible, “entitlement” let people bring themselves into their jobs.  It gave them the autonomy to find purpose in their work.  It let employees feel engaged.

Those days are gone.  Most businesses are not going to build the economic safety net back into their cost structures.  Employee disengagement is here to stay; we created it, now we have to manage it; and managing it means that HR will need to change its beliefs and build a new paradigm.

Here’s where Change Managers can help.

Reduce the Economic Worry:
Compensation is a big issue for HR to unlearn.  An industry has been built up around the performance pay experiment that hasn’t worked.  There are lessons in the past pointing to the value of solid base pay that is marked to the market and then topped up by sharing company profits. 

Performance appraisal is another sacred cow in HR’s performance belief system.  This monster was created by linking pay to performance.  Unfortunately we don’t have the social engineering skills to make it work.  Now the system is dreaded by all and serves no one.  Empirical evidence tells us that it’s time to unlink pay from performance – if we can get HR to go along.

We need to work with HR to create an abundance mindset that encourages employees to constantly look for and interview for new job opportunities.  One of two things will happen: employees will either learn how good they’ve got it, or the company will learn it’s under-valuing them.  Either way the employee moves to a new economic reality.

Finally, severance is a reality that many employees will face; they shouldn’t have to fear it.  We need to help HR enunciate and communicate severance policies that respects the employees’ contribution based on their job level, age, and time in the job.  Employees deserve that peace of mind.

Stratify Employee Engagement:
The 30% figure is an aggregate; we need to help HR focus where it matters.  

Veterans in the workforce are invested; whereas new entrants aren’t; however, recruits from the “social media generation” are going to be difficult to engage.  Most aren’t looking for a career; they’re looking for an experience.  Is low engagement a form of resistance to be conquered or is it a temporal condition that requires patience?  Change Managers know the difference and have the appropriate tools for either situation.  

Where Change Managers need to apply some new thinking and find new tools for HR is for that sliver of talent that understands the company’s DNA and wants to carry the gene forward.  We need to work with HR to learn what it takes to engage those who are interested in the company’s future.

Communicate Tough Love:
Employees offer their unique gifts when they have purpose at work; however, purpose comes from principles.  Get HR to write down the principles of the business?  How are employees expected to act?  How should employees treat each other and their customers?

HR needs to let employees know the rules of the game and know they will be held accountable.  Change Managers can help through their knowledge of two way communication and expertise in setting up accountability regimes.

Let Customers Drive Engagement:
Companies have eroded their commitment to employees, and employees know it.  HR needs to work with management to give employees a purpose that transcends the company.  Employees want to be valued and customers provide this.  

Linking employees to customers is a sweet spot for Change Managers.  We know how to create a short line of sight between employees and customers – and we also know how to show HR and managers how to get out of the way.

It's Just A Beginning
So, the above are thought starters on how Change Management can help HR build a new paradigm for employee engagement.  This is important work if we are to avoid a backlash.  For years HR have worked with their companies to become “kinder and gentler” in an attempt to increase employee engagement.  It hasn’t worked.  I dread that, out of exasperation, management will return to harsh models of command and control.  

We must avoid this.  We must help HR find a new paradigm for employee engagement as supported to by advocates such as Daniel Pink; however, our first task will be to help HR look beyond itself and its constraining orthodoxies.  

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