Six Hard Facts Every CEO Needs to Know About Employee Engagement
Posted on February 12th, 2016
Written by: Tom Devane
Part I: Disengaged Employees Cost You Money
The war on talent. Lean organizations. Fierce competition. If you’re like most CEOs, you’re well aware of the challenges facing your business. You’ve tried quality. You’ve tried Lean Six Sigma. But in today’s environment, there’s only one sustainable competitive advantage. Employee engagement.
Let’s start with a definition of employee engagement.
At WorkplaceDynamics, we define employee engagement as a powerful connection. A connection that results in employees’ contribution of discretionary effort and energy that benefits both your organization—and the individual. As the executive leader, you notice employee engagement in individuals who are passionate about what they do. Employees who are dedicated to your organization, who are not out looking for new opportunities. Employees who give 110% to your organization because they want to.
Here are six hard facts every CEO needs to know about employee engagement:
- Disengaged employees cost you money.
- “Show me the money” isn’t where it’s at.
- Disengaged employees are “silent killers”.
- Ignoring disengaged employees hurts your bottom line.
- Disengaged employees aren’t HR’s problem to fix.
- Engagement isn’t just for frontline employees and middle managers.
This series will discuss each of the six facts, but let’s start here:
Fact #1: Disengaged employees cost you money
Disengaged employees are far more likely to leave your organization than those who are engaged. And make no mistake, employee turnover is costly. Research shows the cost to replace senior managers is 1.5 – 2 times their annual salary1. Similarly, the replacement cost for employees and team members is 70% of the annual salary by the time recruitment costs, productivity time, onboarding, etc. are considered2.
Picture this: You’ve got 10 disengaged middle managers who left your organization for different opportunities. Conservatively speaking, that’s $750,000 worth of talent that just walked out the front door. Ouch! But even worse, what if they don’t leave?
Imagine the same group of middle managers plopped in their chairs. They stay, disengaged, unenthusiastic, and lacking passion. They could also be compelled to undermine your efforts and spread their misery like a cancer. Now that’s painful.
Disengaged employees cost you in terms of productivity, too. Research reveals organizations with a high-engagement culture outperform others by more than 20%. And let’s not forget, productivity is a key indicator of an organization’s potential for long-term growth.
This time, let’s say you have five disengaged managers on your staff. With the unproductive dollars, you could acquire a new, engaged manager who kicks the strategy ball forward. But keep in mind, this leaves you with one true contributor when you could’ve had two.
Consider a larger organization with 100 disengaged employees. It could’ve acquired the talent to staff two full departments of ten high performers each—or opted to invest the money for a capital project or bonus distribution.
And that’s not all
A lack of engagement will cost your organization in other ways too, including quality, safety, and customer retention. According to Gallup:
- Quality is 41% lower in organizations with disengaged employees.
- Safety incidents are 41% fewer when employees are engaged.
- Customer satisfaction is reported to be 10% higher in engaged organizations.
Next time, tune in for hard fact #2: Show Me the Money Isn’t Where It’s At.
1 Bersin and Deloitte
Fun Myths to Debunk Right Now
Posted on February 10th, 2016
Written by: The Fun Dept.
How to Develop Workplace Culture through Fun at Work
So what challenges, roadblocks, and objections might you face when you are considering the development of employee culture through fun at work? Let’s tackle the most common objections we’ve seen in our experience in program development. They may be your own concerns, or the concerns of other leaders in your organization – in any case, prepare for naysayers with our help. If you are petitioning for leaders’ support, use the information here to make the business case for fun at work.
Myth #1: Creating fun is expensive and time consuming.
The typical model for fun is the company holiday party at a large banquet hall, or some fast-paced, one-and-done, day of teambuilding that replicates the popular Survivor series on television. With cost-effective, brief, and well-designed deliveries of fun, delivered to small groups over time, your company will develop a customized model that is seamless and stress-free in form and function. And, you’ll find that short, regular engagement produces longer-term results.
Myth #2: Fun is frivolous.
Well, this objection has an easy answer and it’s all in the dollars and sense. Gallup estimates companies lose an average of $2,246 per disengaged employee per year. Can you do the quick math and determine what that might mean to your bottom line? Increasing employee engagement is anything but frivolous.
Myth #3: Employees don’t want to make fools of themselves; they won’t want to participate.
Yup, being self-conscious among co-workers can be a barrier. We’ve seen it in action. Most people are self-conscious to some degree. When leadership is aware of the existing personalities and culture, and planning thoughtfully to get everyone involved in an employee-focused event, you will prepare for those uncomfortable few who may work to be wallflowers. Through deliberate planning, and with experience, trust and optimism will win the day—and you’ll master the art of engaging even the most shy among your colleagues.
Myth #4: I don’t want to deal with the office politics that might crop up.
Office politics, hierarchy, and trust issues affect every workforce. You might wonder what would happen if you brought all of that unrest and buried feelings into an enclosed space for a “fun” event. We can assure you, after watching the fun in real life everything irons out once the right programs are in place. With years of fun under our belts, we have witnessed more unity than disconnection, and a surprising breakdown of barriers and dissolving of politics. Turns out that fun programs—when done right—actually serve to bond your staff together. Give them that chance, and you’ll see it for yourself.
Myth #5: I am not sure I know how to create fun that my staff will enjoy.
We can relate. When The Fun Dept. launched, we studied, researched, and developed hundreds of sustainable and easily adopted engagements that had broad appeal. So where do you start and how do you get your team to embrace a new mindset of fun? Design and develop programming that harmonizes with the personality and culture of your workplace to build that much-needed sense of connection.
Myth #6: I don’t feel comfortable promoting fun (and I don’t feel like I’m the most fun person, either).
Relating to your staff, employees, or workforce isn’t always a natural or innate talent, that’s true. We are culturally developed in ways that are specific to our work environment, upbringing, or beliefs and values. Leadership in employee engagement begins with taking responsibility for the uptick in morale, productivity, and creativity. Just because the development of an engaging culture – or fun at work – does not feel natural does not mean it can’t happen; it simply means you need a launch plan and design support for your program, and you may need a little hands-on help from the experts.
Myth #7: Getting expertise to help develop programs is expensive, right?
Okay. We have to spend some time on this objection. We hear this worry for two reasons. First, few operational budgets include a line item for employee engagement. So fun is already breaking the budget. (Luckily, there’s an easy solution: Add a line item. And then watch other line items improve!) Second, most companies’ leaders attempting to develop a fun culture with employee engagement throw a big wad of dough at the wall once and hope it “sticks”. In fact, they usually spend more money than we would ever recommend. Remember the famous line from a song, an adage we often use in real time: “Money can’t buy me love?” Well that’s a truism.
Are You Walking the Talk?
You have the power to support it or to squash it. Your actions are very important. If you are just paying lip service to engagement and fun, without actions to match, the initiative will fall flat. Employees generally have a strong and accurate sense about whether their leadership cares or not. Show your employees that you care—that you’re truly part of the team—by joining them in their new, fun adventures. That means participating in the fun activities and being authentic in your participation.
Source: Playing it Forward
eBay: Creating a Marketplace for Engaged Workers
Posted on February 8th, 2016
Written by: WorkplaceDynamics
Innovations in Attracting and Retaining Top Talent
eBay, the company synonymous with e-commerce, continues to innovate, and not just with the data it manages and the transactions it oversees. It’s innovating how it attracts and engages employees. Look no further than Austin, Texas as an example.
The company, headquartered in San Jose, California, has about 20,000 employees worldwide. Yet even in its smaller locations like Austin, which has about 400 employees, a deep investment in employee engagement is helping the company stay focused.
An engaged workforce is the key to retaining top talent
As a business, eBay is no youngster, recently celebrating its 20th anniversary. Part retailer, part technology powerhouse, it continues to transform how people shop and do business worldwide. As a workplace, eBay leadership understands employees are the foundation of its success. The company recently announced expanded family leave benefits for new mothers and fathers as well as employees who are caring for sick family members.
Leadership believes an engaged workforce is key to employee retention in a competitive environment, said Zachary Jacobson, General Manager. He’s part of the Austin team that has been a perennial winner on the Top Workplaces list. In 2015, it ranked No. 26 among mid-size organizations (150 to 499 employees) in the Austin area.
A talent war in the local job market creates competition for good employees, and eBay competes for all levels of talent, Jacobson says. On top of that, the recent split of PayPal from eBay has added another sense of importance to the efforts. Given the strong competition for top talent and the perceived threat of layoffs, eBay wants to ensure it nurtures as strong a workplace culture as possible to retain employees.
Success is a “we” thing at eBay
Among its leadership principles, Jacobson said:
- Success is a “we” thing at eBay.
- Employees should engage directly to build the culture.
- Employees will want to do what they love to do.
To support those principles, eBay’s leadership in Austin decided to create—and support—four different committees from which employees could choose to get involved:
- Branding: build the eBay brand as a leading corporate citizen in central Texas
- Social innovation: connect with coworkers to support and partner with charitable causes
- Engagement: drive employee loyalty
- Communications: improve company communication
Employees could choose whether or not to get involved with a committee. Leadership provided the resources, support, and mentors; the rest was up to the employees, including an action plan and monthly review meetings. “We empowered our employees to do great things and to apply their passion to something meaningful,” Jacobson said.
An investment in employee engagement speaks volumes
The Austin team recently measured employee engagement through the WorkplaceDynamics survey, and the results did not disappoint. In anonymous comments, Austin’s employees repeatedly said they felt appreciated, motivated, and supported.
“The leadership is awesome and there’s peace of mind knowing people stand 100% behind you, whether it’s a manager or a teammate,” one employee said. “eBay encourages me to be the best I can be. I love eBay and I love what we do,” another commented.
Leadership’s efforts are showing results. Workplace positivity among eBay’s Austin employees measured 12 percent higher than the benchmark for the information technology industry.
“Never before have I worked for a company that takes employee engagement so seriously,” Jacobson said. “We want to promote the eBay brand as being a great place to work in and around Austin, Texas.”
Is There a Place for Fun at Work?
Posted on January 25th, 2016
Written by: Doug Claffey
Celebrating National Fun at Work Day
National Fun at Work Day on January 28 is the perfect time to think about the role fun plays in the workplace. Your organization—as well as your employees—can benefit from more of it.
For starters, a fun workplace can be an indication of an engaged workplace. Fun encourages presence, participation, and teamwork. It breaks down barriers. It promotes bonding and a positive culture where employees are better connected to your organization. Fun also spurs creativity, productivity (yes, really!), and enthusiasm. It’s a great stress reliever, and it gives people something to anticipate. It may even help your organization attract and retain top talent—and that’s good for the bottom line.
But let’s be clear. Fun doesn’t mean frivolous.
Some might consider fun a waste of time, or something that interferes with productivity. Done right, fun promotes the sense of teamwork that increases long-term employee engagement and improves organizational health. On the flip side, a tunnel-vision focus on results that discourages togetherness can hurt performance and even drive people away.
Do what resonates with your organization’s workplace culture.
There’s no one-size-fits-all approach to fun at work—and it can be simple, too. Involve food, games, contests, or something that benefits a charity. The point is, know your culture. Do something that’s likely to encourage participation and teamwork.
One Top Workplace celebrates Bacon Day. Another has Food Flash Mob where food shows up spontaneously (“Second floor! Cupcakes!”). When it comes to fun at work, what’s important is to choose what resonates with your organization’s culture—and make sure it’s supported by senior leadership.
Just like most initiatives, fun at work must start at the top.
Leaders are responsible for creating a culture that encourages people to give their all—and fun at work is no exception. The Fun Dept. drives this point home in its new book, Playing it Forward. “Leaders launch the fun; informing employees that it’s not only ok to have fun, but that they are going to be right there with them.”
So don’t be afraid to participate. Embrace the mantra of retired four-star general and former Chairman of the Joint Chiefs of Staff Colin Powell: “Surround yourself with people who take their work seriously, but not themselves.”
Mark your calendar for January 28.
Celebrate National Fun at Work Day. But don’t stop there. Find opportunities to encourage fun every day. Embrace the fun and get involved. Otherwise, your employees will hesitate to engage and your organization will fail to realize its benefits. And that’s no fun.
What do you do to encourage fun at work? Let’s hear your ideas.
A focus on workplace culture and company values yields bottom-line results
Posted on December 11th, 2015
Written by: Bob Helbig
OC Auto Team Celebrates Eight Consecutive Years as a Top Workplace
The first year John Patterson’s company participated in the Top Workplacesprogram, the survey results surprised him. He discovered that employees at his auto dealerships were not as engaged as he thought. “I place a real high priority on harmony,” said Patterson, who owns three auto dealerships in Orange County, California. “When everything is running in the same direction, it makes things a whole lot easier.”
Since then, reviewing survey results—especially candid comments—has become essential to measuring employee engagement at the dealership. Do they want more tools? More training? Changes in the 401(K) plan?
A focus on workplace culture yields results
Fast forward, and Patterson’s OC Auto Team is now celebrating its eighth consecutive year as a Top Workplace. Getting there and staying there isn’t because of one thing but “a series of little things,” he says. Staff camaraderie. Clear goals. Community service. It’s all part of the deal.
When the company first appeared on the Top Workplaces list in 2008, Patterson had about 100 employees. It now has 150 among Tustin Mazda, Huntington Beach Mazda, and OC Hyundai. As the company grows, it works hard to maintain its culture. They’ve realized the benefits of this focus, including with employee retention. At just 3% per year, turnover is extremely low—particularly for a sales environment.
“When people join our organization, they understand they are going to be treated with respect and honesty,” said Patterson, who founded the business in 2004 after 11 years at Toyota corporate.
Six company values are the key to their success
According to Patterson, six core principles help guide the company’s success:
- Work that is enjoyable, accountable, and consistent
- Engaged employees
- Long-term customer loyalty
- Making good, long-term decisions daily
- Community service
That last point has earned Patterson special recognition. The Orange County Register honored the company with a social responsibility award this year. It noted the company gives employees two paid days per year to serve charitable causes, including school activities or their favorite community passion.
“We want to be the best servants of our community and of each other,” Patterson said.
It’s a formula that works because Patterson leads his employees by example and creates an environment where he “treats his customers as though they are guests in his home,” says Lynda Nelson, the company’s director of customer affairs.
She estimates that more than half of prospective employees learn about the company because they discover it ranks as a Top Workplace.
Patterson knows community involvement is good for business. After the 2008 recession, “our organization not only survived but thrived because our customers rallied behind us,” he said.
Each year, the company gives in excess of $200,000 to charities such as the Boys & Girls Clubs, Children’s Hospital of Orange County, and a local juvenile diabetes organization. It also gives plenty of smaller donations to bands, schools, and soccer teams.
In November, for example, the dealerships donated 700 pounds of food to the Second Harvest Food Bank and matched customer donations of pocket change to give $2,200 to the Orange County Rescue Mission. It sends a message not just to the community, but to the employees as well.
“They are part of something bigger than selling cars, servicing cars, or selling parts,” Patterson said.
Employees live the dream with $100,000 bonuses
Posted on December 7th, 2015
Written by: Bob Helbig
A Company Bonus is Nice. A $100,000 Bonus is Life-changing.
That’s the amount pocketed this year by employees of Hilcorp, a Houston-based, privately held oil and gas exploration and production company. They are living “Dream 2015,” a five-year incentive plan that offered a $100,000 cash award if the company doubled its production rate, reserves, and value. The company reached those goals in April and checks were distributed to all employees in June, the Houston Chronicle reported. Employees hired after June 2011 participated on a prorated basis.
Founded in 1989, Hilcorp has 1,400 employees nationwide, with more than 400 based in Houston. The company ranked fifth on Houston’s 2015 Top Workplaces list—this year being the sixth consecutive win for the mid-size organization.
The $100,000 bonus was life-changing for many of the company’s employees. New homes. Debt reduction. College tuition for children.
“We had a huge celebration in the corporate office and in the field after we made it,” Hilcorp CFO Shelbie Dezell told the Chronicle. Incentives helped employees overcome the challenges of falling energy prices. “Lower prices created another goal for us to accomplish and prompted us to look for better ways to do things,” Dezell said.
But the big bonus program isn’t just an altruistic carrot. Hilcorp teaches employees to work like owners, to strive for goals that everyone understands and to reward every employee, regardless of their role, to make the company successful. It’s part of Hilcorp’s open-book management principles, which include:
- Know & Teach the Rules: Educating employees to think of themselves as oil and gas business owners.
- Follow the Action & Keep Score: Providing daily updates on company performance to all employees.
- Provide a Stake in the Outcome: Rewarding all employees when goals are achieved to inspire them to work like owners.
This isn’t the first time the company has offered big rewards to employees. In 2011, it gave each employee a $50,000 voucher for a new car for meeting five-year goals in its “Double Drive”: doubling Hilcorp’s value, oil field production rate, and net oil and gas reserves.
That’s a lot of money. But Hilcorp executives say workers have created a lot of value. Executives believe the incentives spur employees to work that much harder to reach goals.
Now that the “Dream 2015” challenge has come to a close, Dezell told the Chronicle that company executives have started working on a new five-year vision plan. “We feel that it’s important to always have goals,” she said.
Hilcorp’s generosity extends to charity as well. Each new employee gets $2,500 to award to an organization of his or her choice. Then each year, the company matches up to $2,000 in charitable donations. The program is designed to promote each employee’s ideals.
Employees say their success also has a lot to do with their founder and CEO, Jeff Hildebrand, who is accessible, communicates openly, and makes each employee feel valued.
“Hilcorp is a rare company that cares deeply about all of its employees,” one of its employees commented. “We are recognized for all working hard and we all reap the benefits.”