IES Annual Members Conference 2013: The Many Faces of Engagement

Jointly written by Dilys Robinson, Luke Fletcher and Lisa Hughes

IES’s annual conference explored different aspects of employee engagement. Participants from our member organisations and invited guests contributed to a lively debate about this compelling, yet often slippery, concept.

Pets at Home

The conference chair, Sally Hopson, Customer and People Director at Pets at Home, described the company as having a natural shared purpose, with almost all employees being pet-owners themselves. The company adheres to its values of putting pets before profits, even to the extent of losing out financially. The goal is to ensure that staff are ‘friendly experts’ who, via good quality training, want to share their expertise with customers in a friendly, approachable way. Staff were included in deciding upon the company values, which led to ‘pets before profit’ being added. The awards that Pets at Home has received demonstrate the success of the company in engaging with its employees and customers.

Sally proposed a basic equation to explain the business case for engagement: engaged colleagues provide a better service to customers, increasing customer loyalty, which leads to increased profits. Various processes have been put in place to increase engagement: a robust selection process involving store teams; a ten month mandatory training programme; further voluntary training; pay rises to recognise increases in skill.

Pets at Home can demonstrate the impact that engagement has had on performance. Turnover decreased from 70% in 2004 to 17% now, showing an inverse relationship with engagement. The ‘Net Promoter’ measure of customer loyalty is higher in stores where engagement is also higher. Pet care knowledge also increases in line with engagement, which in turn increases customer satisfaction; ultimately customers spend 4% more in stores with engaged staff.

Sally offered five key learning points: getting the whole senior team to be visible and approachable; two-way communication; engagement should be a KPI; the need to continuously make a business case for engagement; and to live the organisational values.

Pets at Home directors all hold listening groups across the stores, the CEO gives a quarterly update podcast, and directors all do ‘way of working’ (WOW) days, working on the shop floor.

Where is engagement going? A critical perspective

This thought-provoking session, delivered by Linda Holbeche, co-Director of The Holbeche Partnership and Visiting Professor at Cass, Bedfordshire, Imperial College and London Metropolitan Business Schools, explored the contentious idea that by seeking to improve engagement, organisations might actually be making matters worse.

Engagement has been defined in various ways: from a psychological reaction to job design and role, to a positive anti-thesis of burnout, to a general work-related attitude. Linda’s perspective was that of a social exchange, representing key aspects of the psychological contract. Despite different definitions, engagement is widely agreed to be a crucial driver of individual as well as organisational performance.

However, there seem to be difficulties at persuading senior leaders to invest in engagement initiatives, and HR practitioners struggle to convince senior leaders and CEOs of the ‘business case’. The underlying assumptions regarding social exchange and the psychological contract imply that principles of mutual trust and reciprocity between employers and employees will sustain performance in the long-term as both employers and employees share similar interests/agendas; however, this process relies on secure and stable environmental conditions and this notion is no longer valid. The employer no longer wants a loyal and steadfast workforce, but rather a workforce that is flexible, adaptable and agile. This creates a conundrum for HR managers who want to bind and connect people to the organisation, yet also want flexibility and adaptability in response to market changes. What is good for business is not necessarily good for the employee.

As a result, employees are becoming disengaged, so many organisations are now pursuing employee engagement as a way to increase productivity and competitive advantage. Five main things are needed for employee engagement: social growth, intellectual development, emotional connection, voice, and equity. However, many employees are not in job roles that allow them to fulfil these needs satisfactorily due to increased insecurity, work pressure, organisational change, and as an erosion of trust and equality. An organisational approach to engagement is needed, focused on up-skilling line managers to be able to foster engagement in their direct reports.

A ‘future’ model of employee engagement would view the core drivers of engagement as a) connection and identification with the organisation, b) having scope to grow and develop as an individual, c) feeling supported and respected, and d) having a voice and feeling involved. For this to succeed, organisations need to develop an approach to engagement that is manager-led, but HR-supported; proactive and context-specific rather than reactive and generic; and focused on the individual and their daily work life rather than on people as resources and as a ‘unit’.

The Engage for Success movement: Progress and future direction

David Macleod and Nita Clarke, who jointly chair the Engage for Success movement, began by setting the context: employment trends are moving away from engagement. Getting employers to understand command and control does not work can be challenging, and in the wider social context there is a lack of trust which also exists in organisations, with workers now questioning senior management. Most jobs have a large amount of discretion, meaning employee performance within the role is critical to organisational performance – yet two-thirds of employees say that they have more to give at work. If the UK’s engagement levels increased to that of the Netherlands, GDP would increase by £26 billion.

The four enablers of engagement are:

• A strong strategic narrative
• Engaging managers and leaders
• Employee voice
• Organisational integrity.

The Engage for Success movement was launched by the prime minister to raise the profile of issues associated with engagement, to shine a light on best practice and give people confidence, ideas, networks and outcomes from engagement. Engage for Success is run by a mixture of academics, practitioners, the core team and sub groups who are focusing on specific issues such as the evidence supporting engagement and barriers to engagement. One of the barriers is a lack of support at board level; interviews with CEOs demonstrated that it was more emotionally demanding to be an engaging leader than a control and command leader.

In a globalised environment, to compete we must have innovative ideas, which stem from engaged employees. Nita encouraged the audience to go out and make the case for engagement and asked anyone who would like to be involved in Engage for Success to get in touch. David finished the talk with a sombre fact that in hospitals, if engagement goes down, after eight months the mortality rate goes up.

Engagement at Unipart: The importance of continuous improvement?

John Greatrex, Group HR Director at Unipart Group, presented a practical and embedded approach to employee engagement. He recounted the story of how Unipart incorporated engagement strategies within continuous improvement and lean practices. This interconnectedness has been the crucial success factor for Unipart’s employee engagement strategy.

At Unipart, employee engagement is viewed as a holistic organisational-level concept: it is part of the company’s way of working. The goal for Unipart is to inspire and to enable its employees, and to do so the company focuses on the day-to-day experience of employees and how leaders, line managers and individuals influence this experience.

This multidimensional perspective is enacted through a reciprocal process linked with lean techniques and continuous improvement methods. The first stage is to diagnose the drivers of engagement, and how these may be affected by specific work- or organisational-related changes, plans and initiatives. The second stage is to identify and develop tools, based on lean or continuous improvement techniques that can enable the drivers to occur and/or can solve potential problems and reduce issues detected. The third stage is to implement and evaluate the tools in the workplace. A localised and context-specific approach may need to be adopted as each part of the business has different needs and working practices. The final stage is to audit and measure how effective the process as well as the interventions were at a) identifying and resolving potential problems or issues, b) enabling and inspiring employees to give of their all, and c) at delivering tangible benefits and positive impact on KPIs. This process continually cycles round, and that it is important that employee engagement is not seen as an end-state, but rather as a form of continuous improvement.

For Unipart this embedded and reciprocal approach to employee engagement has been successful at delivering significant added value to the business. Employee absence and sickness levels, staff turnover and accident rates, and customer satisfaction and service outcomes have all improved.

Creating an environment where employees thrive

Wendy Hirsh, Principal Associate at IES, described her work with Wm Morrison Supermarkets plc, to find out if organisations could have a positive impact on people. In retail, turnover is generally high, so the research tried to uncover how organisations could behave to make employees take some engagement with them. It has become clear that command and control does not work, as employees will only perform as much as they need to in order to get the job done. Engaged staff will focus on their current organisation and feel capable of success, therefore perform well.

What happens when organisations cannot provide a secure employment environment for people? Staff can become disengaged with changes and restructuring and once disengaged, it is difficult to re-engage them. There is a need for organisations to support employees in gaining a wider understanding, so that they know that they may not be there permanently, but whilst they are there the employer will help to develop their skills to improve their employability. It is a combination of engagement and agility that is needed in an environment that will allow employees to thrive.

Norman Pickavance, former Group HR Director, Wm Morrison Supermarkets plc, began by explaining that, when he joined, people were worried about losing sight of where the company had come from. Managers were struggling to translate values into behaviours, and staff lacked confidence in the importance of their role. This led to staff being supported through qualifications so that employees had a greater sense of pride in their work. Competitions were also set-up, enabling employees to showcase their skills and receive recognition. In addition, all managers were put through coaching. The result of these initiatives was that customer feedback improved, exit interviews were more positive, staff turnover decreased from 40% to 15%, and more highly engaged stores were shown to have higher sales.

In all organisations, there are ‘ugly’ managers, those who are very commanding in style, are cynical about new initiatives and can have a negative impact on the culture. When developing a new leadership framework at Wm Morrison, Norman handpicked 12 of these managers to work with him on behalf of the CEO on a new leadership framework. They championed the initiative as they had been involved and others were prepared to take part because they took the attitude that ‘if x has done it, I will’, demonstrating the importance of getting opponents on side.

Engagement in Higher Education

Nicola Carter, Senior Employee Relations Adviser at the Universities and Colleges Employers Association (UCEA), began by setting the context for engagement in higher education. There have recently been changes in the higher education sector, with increased tuition fees resulting in increased competition and a shift in focus to student experience. Within universities there are two distinct staff groups, the academics and the support staff, who engage in different ways. Support staff are more likely to be extrinsically engaged, whereas academics are more likely to be intrinsically engaged with their own work. In periods of change, however, it is important that all staff are engaged with the wider university.

Nicola drew on one of the common themes that had emerged out of earlier talks, which was how autonomy could increase engagement. In the case of academics, however, there could be too much autonomy, making the link with the organisation more difficult to see. UCEA has been working with IES to develop a higher education engagement toolkit which has provided examples of engagement practice that works well within HE, such as cross-university group working.

Karen Cregan, assistant HR Director (Strategic Developments) spoke specifically about the University of Chester, which is tackling engagement with a very limited budget. The university incorporates engagement into each strand of its HR strategy, e.g. wellbeing, reward and recruitment. Karen talked about some specific initiatives: world café events, which have worked very well; working towards Investors in People gold; the Workplace Wellbeing Charter; a Health4All programme; quarterly open management meetings which all staff can attend; a strong focus on employee development for all staff, with a lot of training done in-house to make it affordable; and a staff enterprise society to encourage innovation. The role of managers is seen as to support staff, allowing staff to work autonomously, and to focus on people’s strengths.

Academic and practitioner perspectives on engagement: Convergence or divergence?

Professor Katie Truss, Head of the People, Management and Organisation Group at Kent Business School, University of Kent, examined the perspectives of employee engagement from two key stakeholder groups: academics who research the topic and practitioners who enact the practice. Academics prefer precise definitions, a focus on the individual and on psychological processes, and want to identify theoretical explanations for phenomenon. Managers and practitioners prefer loose definitions, a focus on the organisation and on HR/managerial strategies, and want to ascertain the practical impact of a phenomenon.

Academics view engagement as a distinct and dynamic psychological state that is experienced by an individual at work and refers to the relationship between one’s self and one’s work role. Practitioners view engagement as a more stable attitude and set of discretionary behaviours that are aligned with organisational values. Although the two conceptualisations differ, there is a common focus on improving both employee wellbeing and organisational performance that aligns the two.

There are limitations to both perspectives. The language used by academics is jargon-heavy and not easy to translate into practice, while practitioners blur the boundaries between engagement and its drivers/outcomes and other well-established concepts such as job satisfaction; this is partly due to practitioners facing barriers and difficulties when gaining buy-in from managers. Differences can be overcome if academics and practitioners work more closely together in the future.

Engagement debate

Mary Mercer, Principal Consultant at IES, facilitated an interactive debate about engagement challenges and successes.

Common challenges were difficulties in getting engagement to be acknowledged as a priority by senior managers, who often behaved in ways that contradicted organisational values; the ability of line managers to engage staff; people being more engaged in their profession than the organisation; change and/or financial constraints acting as a barrier; difficulties in correlating engagement to outcome measurements; a lack of capacity within HR to lead the engagement agenda; problems in engaging more marginalised groups; a hierarchy and tradition of command and control management, especially in regulated organisations; and a lack of responses to staff surveys or belief that action will be taken as a result.

Participants had experienced successes in: providing an honest commentary of staff survey results to staff; a staff action group to meet with senior management; involving staff in strategic planning; encouraging managers to spend time with teams and genuinely listen; conducting listening focus groups in operational areas; creating a brand and set of values that staff can connect with; developing strategies around values; creating a feedback loop with those having development opportunities then providing advice and expertise to others; informal project-based inputs to colleague’s performance reviews; action learning in departmental meetings; and building HR involvement in business.

Learning points were identified under four headings: localised initiatives, the role of managers and leaders, organisational context and change; and measuring engagement and developing a strategic view.

IES Engagement Round-up

This session was an opportunity for IES to present the projects and work that they have conducted on the area of employee engagement.

Dilys Robinson, Principal Research Fellow, gave an overview of IES’s research into employee engagement (details can be found in the presentation and many can be downloaded/purchased from the IES website), and outlined recent client projects.

Peter Reilly, Director of HR Research and Consultancy, discussed HR and rewards systems in relation to engagement, and presented a total rewards and contextualised account of implementing rewards. Issues to consider include how reward practices are communicated, implemented, measured and segmented/bundled.

Mary Mercer, Principal Consultant, outlined the reasons why performance management often fails, and the role of the ‘engaging’ manager. Important aspects include clarifying performance expectations, giving good constructive feedback, implementing a fair and trusted process and allowing for flexible working.

Penny Tamkin, Associate Director, ended the session with a discussion on the relationship between leadership and engagement, described her research on outstanding leaders, using key features of social exchange relationships and identified barriers for leaders and managers trying to create engaging environments.