My company helps customers decrease turnover or increase employee performance using predictive analytics.
During these assignments we identify existing employee data that can be used to help us understand patterns and predict top/bottom performers or job candidates with a low flight risk, pre-hire.
At times, we are asked if employee engagement data would be meaningful in our analysis.
Giving a false sense of control
Businesses and their HR teams have measured employee engagement as a way of trying to improve business performance. Millions have been spent conducting engagement surveys, and their follow on programs, targeting areas that measure low in employee engagement.
Yes, it can be satisfying to see reports that highlight areas in the organization with and without engagement.
But, engagement reports often provide a false sense of control that engagement, training and other employee development programs will lead to an increase in actual, real business performance.
It seems that executives and their HR teams, at the highest levels, have bought into the myth that high engagement leads to high performance. I say it’s a myth because I can name on one hand the number of companies that have done their own research proving this connection.
6 reasons to stop using engagement as a business measure
With that in mind, here are six (6) reasons businesses need to stop using employee engagement as a measure of business success.
- Employee engagement isn’t the goal. Business performance is the goal. Most businesses don’t, and can’t, tie employee engagement results to an increase in business performance. Engagement programs can sometimes show an increase in engagement, after a program, but not an increase in actual performance. Employee engagement is a middle measure. No company exists to have engaged employees. Businesses exist to perform.
- Justifying any kind of program based on someone else’s research is a less than rigorous business practice. Most engagement programs mention someone else’s research (either from a vendor selling employee engagement solutions, an article from an industry though leader purporting to show a connection to real performance,) showing a tie between engagement and shareholder value. You need to read beyond the headlines. Most of the “performance” has been gathered from interviews with senior leadership about their impressions vs. looking at actual performance. For actual businesses that published some research early on, those copying need to realize that these other companies had a particular engagement issue, in a particular industry, with their own particular culture, selling their own particular solutions at a particular time in their evolution. Jumping to the global conclusion that engagement activities will have the same impact for your firms is a massive, risky and very expensive leap.
- Rigorous analytics often show little or no correlation between high engagement and an increase in business performance or a decrease in turnover. Take the real example of a large software firm who implemented an employee engagement program for their entire organization. Engagement scores among their sales team were over 90 percent. They grew their brand to be one of the best brands to work for. They were the No. 1 software firm to work for within a large region of the U.S. (five years in a row). Yet, they also had close to 80 percent annual turnover and sales were plummeting. Engagement programs definitely increased engagement. People loved to work there, but they weren’t performing. Engagement is a middle measure. Engagement is different than real business performance.
- Engagement is a middle measure. At best, employee engagement scores are potentially interesting as a metric that indicates something the business cares about. But this connection needs to be proven. The business can’t pay it’s employees or shareholders based on engagement scores. They need to tie the engagement scores to someone that helps them pay their bills or reconsider the reason for all of the ongoing engagement research.
- Engagement scores are not actionable. When a score isn’t tracked to an individual, the most benefit the score can provide is to show a trend, i.e., 65 percent of people in this region are/are not engaged.
- It’s a vanity metric for the company. I love the idea that people are behind their vision and like working there. It makes a manager and HR feel good. Who wouldn’t want to be the best place to work with everyone marching behind their vision? I’m not negative on employee engagement scores for any reason except that businesses and their HR teams have been led to believe engagement surveys equal business success. And they don’t. I actually applaud organizations in years past for trying to find and measure metrics that could lead to a prediction of future business performance.
It’s just a “feel good” business metric
Employee engagement was a good try, but ultimately, doesn’t reliably show a strong connection. Current predictive analytics methods and approaches and better systems and data make it possible to move beyond this “middle measure substitute” to predicting real business performance.
How to Build Productivity Through Reward and Recognition
Employee engagement surveys can be useful when used the correct context – and “right sized” in terms of their importance to the organization. If they are used to take a gain a general measure of sentiment then they have value.
My concern is that engagement surveys have grown to be (in many cases) a substitute for predicting how well the employees will perform in their roles.
When used as a predictor of performance, engagement surveys are an expensive vanity metric that makes people feel good — but typically doesn’t lead to real business results.