Thursday, April 9, 2009

Why Employee Satisfaction is the Wrong Metric

By Rodger D. Duncan

With more than two decades of experience observing and measuring a wide range of workplace issues, my bottom line advice on such metrics can be distilled into two simple maxims.

First, ask the right questions.

Well, of course, you say! Anybody knows you have to ask the right questions.

But the second maxim may not be so obvious: Avoid asking the wrong questions.

When you ask the wrong questions, you still get plenty of information. Then the information spawns charts and graphs and an endless stream of PowerPoint presentations. And you chase the wrong rabbits.

I frequently hear business people talk about the importance of “employee satisfaction.” They conduct surveys that purport to measure the extent to which workers are happy with their jobs.

These are interesting questions, but often the wrong ones.

If an employer provides free day care, company cars, liberal vacation policies, short office hours and hefty bonuses, workers are likely to be “satisfied.” But being “satisfied” is not necessarily the same as being productive. Even a bankrupt company can have “satisfied” employees.

The right metric to use does not target satisfaction, it targets engagement.

For yesteryear’s command-and-control leader, the paradigm was about compliance. For today’s enlightened (and more effective) leader, the paradigm is about commitment. Commitment does not thrive in an atmosphere of giving and taking orders. Commitment thrives in an atmosphere of mutual purpose, mutual respect, and high levels of psychological ownership.
In other words, engagement.

Workers are engaged when they feel part of decisions that affect them. When they feel trusted. When they feel free (safe) in speaking up about issues that matter.

Truly engaged workers eschew the “subordinate” mentality that says someone else is in charge so the success of the enterprise is someone else’s worry. Instead, genuinely engaged workers adopt the “steward” paradigm. A stewardship is a job with trust. Stewards are proactive, resourceful, and assertive. They provide discretionary excellence – doing the right thing for the right reasons, even when nobody’s watching.

Engaged workers have the will and the willingness to adapt swiftly to changing conditions.

At this point you may be thinking, Wait a minute. I have a business to run. All this stuff about engagement and commitment sounds nice, but it requires too much time and effort.

For those who suggest that the cost of engagement is too high, consider the price of disengagement.

A study by the Gallup organization shows that “actively disengaged” employees – that is, workers who are fundamentally disconnected from their jobs – cost the U.S. economy up to $355 billion a year. The researchers calculate that nearly 25 million U.S. workers are actively disengaged, each year resulting in about 86 million days absent from work, less productivity, more stress, and poorer health for both themselves and for their organizations.

The Gallup conclusions are based in part on its national Q12 survey. The survey takes it name from 12 core questions that Gallup asks workers. The questions are designed to measure the linkage between levels of employee engagement and productivity, growth and profitability.

Some of the questions are “Do I know what is expected of me at work?” “Is there someone at work who encourages my development?” “At work, do my opinions seem to count?”

When The Duncan Company studies culture and performance in an organization, we ask similar questions aimed at measuring engagement. We want to know the extent to which workers seem more interested in accomplishing excellent work than in who gets the credit. We want to know how much employees can see the linkage between their own work and the organization’s “core doctrine” of mission, vision, and values. We explore communication practices, accountability practices and other culture components that reinforce (or undermine) the social contract between worker and organization.

In his fine book Terms of Engagement, Richard Axelrod discusses the principles and practices that result in an engaged workforce. He correctly points out that in high-engagement organizations you will find that

People grasp the big picture, fully understanding the dangers and opportunities facing the enterprise.

There is urgency and energy as people become aligned around a common purpose.
Accountability is fully distributed throughout the organization as people come to understand the “whole” of the system.

Collaboration across organizational boundaries increases because people are connected to the issues and to each other.

Performance gaps are quickly identified and decisively dealt with.

Creativity is sparked when workers from all levels and functions (along with other important stakeholders) contribute their best ideas.

Capacity for future changes increases as people develop skills and processes to meet not just the current challenges but future challenges as well.

So, am I suggesting that employee satisfaction is unimportant? Of course not. Employee satisfaction is often one of the most noticeable hallmarks of a high-performance organization. But employee satisfaction is more often the result of high performance than an overriding cause. The most common cause of high performance is high engagement.

It goes back to the two maxims: (1) Ask the right questions. (2) Avoid asking the wrong questions.

You can rent a person’s back and hands, but you must earn his head and heart. And when you earn his head and heart (engagement!) you’ll tap into a reservoir of energy and commitment that can make all the difference.

Article from The Duncan Report. For more information please click on their link.
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