Quality Employee Engagement Measurement and its Effect on Business Success

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WOULD YOU LIKE YOUR COMPANY TO DO WELL – even in bad economic times?

In 50-plus years of employee attitude, morale and engagement research, Scarlett Surveys has found valuable statistical models which are predictive of business and employee performance: models that ensure the perpetuity of the business. One such equation model is our CEO Success Formula: Competence x Engagement x Organizational Opportunity = Return on Human Capital or, more conversationally put, Ready, Willing and Able.

Today’s organizations require reliable forward-facing metrics to maximize return on dollars invested in human capital while synchronizing the organization’s activities to delight the customer and migrate with shifting markets. The CEO Success Formula is a set of key performance indicators that enable organizations to maximize return on human capital while increasing employee engagement and sense of purpose.

It basically works like this: Human resource economic contribution is the heart of maximizing the productivity of capital (ROI) and human capital is usually the most expensive form of capital, up to 70 % of an organization’s recurring operating cost. Scarlett Surveys has found that projecting return on human capital has substantial value creation potential when proactively managed— especially when top leaders make it a performance requirement.

Let’s look at the CEO Success Formula and genuine employee engagement in greater detail.

Competence (Ready)

Think of competence in the organization as a collective rather than individual phenomenon where unity of effort is more important than the sum of the parts. That’s why we have organizations — because one person can’t do all the work. Too much emphasis has been put on individual star talent management these days at the expense of group engagement and unity of effort where the real value and predictability potential slumber.

Think of competence as a group’s or organization’s collective state of being adequate, well qualified, or masterful in performing a specific set of jobs or functions against set standards and consistently achieving specific outcomes. It’s a reliable statistical measurement of group performance against established or desirable business outcomes. So developing a signature set of group performance standards and tracking group competency in achieving those standards is a productivity and human capital multiplier when managed.

Employee Engagement (Willing)

How many times have we seen a gifted athlete or person of great talent become disengaged or even hostile towards the organization that employs them? They may be masterfully competent or ready to provide great talent but they are emotionally unwilling to focus their talents and efforts for the economic benefit of the enterprise. It’s like hiring a champion race car driver and spending big money on a high horsepower sports car but he refuses to start the car. The driver is ready but unwilling.
True engagement measurement statistically describes this state of willingness and predicts the quality, speed, energy, and enthusiasm of human effort in the organization-by group and by individual. Ready without willing results in poor return on human capital because the capital sits idle. The expert race car driver is going nowhere.


Employee Engagement- Cases of mistaken identity

Some organizations attempt to measure engagement through the use of satisfaction, opinion or consensus-created surveys. As a result, management errantly embarks on fixing the wrong things in an attempt to positively engage more employees, often with deleterious consequences. Extrapolating from a reputable independent study (The Conference Board, TNS survey of over 5,000 U.S. households); over 8.5 million more employees in the US became disengaged between 2005 and 2009. Clearly, this epidemic of disengagement is being fueled by mistaken measurement inherent in poor quality employee survey questionnaires that are measuring employee experiences that have little to do with emotional attachment or engagement intensity. Management is left chasing issues that have little connection to engaging employees so they can willingly be more productive and purposeful.

Similarly, two fundamental precepts necessary to positively engage people are often ignored in employee engagement measurement. 1) Employee sense of fair treatment underpins engagement — if people feel they are treated unfairly, there is less than a 15% chance they will be positively engaged; and 2) the experiences that engage people are different from the experiences that disengage them. If these precepts/psychometrics are not designed into the survey instrument, disengaged employees are inaccurately classified and financial loss continues. Disengaged talent produces negative financial value because the revenue the disengaged produce rarely covers their total employment cost.

Below is a chart summarizing how engagement factors and disengagement factors really operate.

A couple of things to note about these findings based on Frederick Herzberg’s lifelong Motivation-Hygiene Studies and confirmed by our AER survey work: 1) Positive employee engagement cannot be sustained if the preponderance of disengagement factors are not neutralized, and 2) To positively engage employees there is more than “one thing you need to know” and act on post survey. Addressing only one “big” issue does not have a positive correlation to positive long term engagement of employees. While big bangs and trumpets make for energetic photo events, employees need conscientious leadership to give it their all.

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"The AER™ survey tool.. employee engagement 15 drivers model, is very clear. The dashboard presents meaningful data. AER™ has a robust data base for results and benchmarks."
- Program Manager,
US Department of the Treasury

Topic: The 15 Drivers of Employee Engagement

What are the most influential drivers of engagement in your organization?

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Associate Engagement Research

Our signature, comprehensive, employee engagement survey is designed to fully measure employee engagement and contributing factors for sucessful, long-term human resource / talent managment.

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