On Employee Engagement and the C-Suite, by Leigh Branham

10 Mar

I hope you enjoy this post, written by my colleague and good friend Leigh Branham:

I encourage anyone interested in employee engagement to read a report recently released by The The Economist (co-sponsored by The Hay Group), titled “Re-engaging with engagement: Views from the boardroom on employee engagement” .  The report is based on a survey of 331 C-suite executives or senior directors from 19 industries in Europe and the Middle East.  I would be interested in hearing from readers in the U.S. (and internationally) about whether you believe the findings also apply to senior executives in your country, or in your company.

The Survey Findings:

The most disturbing findings were these:

  • 84% of survey respondents say that “disengaged employees” are one of the three biggest threats facing their business.  Yet, only 12% report that their companies “regularly and often” confront staff with “continually low engagement.”  C-suite executives themselves admit that employee engagement is discussed “occasionally”, “rarely,” or “never” at board level in 43% of companies.
  • More than one in five in the C-suite believe that employees are “much more engaged” than those in rival firms, compared with only 7% of respondents outside the C-suite.
  • 47% of C-suite executives believe that they themselves “have determined the levels of employee engagement” in their companies, a view shared by only 16% of senior directors outside the C-suite.  Only 13% of C-suite executives believe that line managers and middle managers are “chiefly responsible” for staff engagement.

My Take:

I was not surprised by the first two findings.  My experience has led me to agree with the report’s conclusion that “a sizeable discrepancy exists between what companies say about the perils of disengagement and how far they will actually go to confront the problem.”  This describes most companies, but not the minority whose CEOs are committed to building best-place-to-work cultures–CEOs like Jim Sinegal at Costco, Kip Tindell at The Container Store, Vineet Nayar of HCL Technologies, Tony Hsieh at Zappos.com, Howard Schultz at Starbucks, Dr. Kim Hoogeveen at Quality Living, Inc., or Graham Weston at Rackspace Hosting (these last two are profiled in our new book, Re-Engage: How America’s Best Places to Work Inspire Extra Effort in Extraordinary Times, co-authored with Mark Hirschfeld).  The business success of these companies speaks for itself that employee engagement works.

Now that “employee engagement” has reached true fad/buzzword status, many CEOs have pretended to embrace it by jumping on the engagement survey bandwagon.  But alas, many have not followed through by acting on employee ideas and feedback.  I think most CEOs no longer need convincing that employee engagement is vital to business success, though some, incredibly, still express doubt. The main reason most CEOs don’t aggressively tackle the employee disengagement issue, I believe, is that it appears “soft” and overwhelmingly difficult (soft = hard) to do so.  After all, in many cases it would mean a complete overhauling of the culture.  Most CEOs, especially at public companies, would much rather, in their boardroom discussions, deal with the nearer-term topic of how to increase quarterly profits.  The irony is, of course, that the surest way to increase profits is to build a culture where engaged employees consistently exceed customer expectations.

The finding that many CEOs are more optimistic than their subordinates about how engaged their employees are compared to rival firms is not surprising considering that most CEOs are generally optimistic and take seriously their role as cheerleader.  The cause for concern lies in the fact that they may be isolated from the reality that those one level down can see more clearly.

Good News, Bad News

What I did not expect to see in the survey was the degree of responsibility that CEOs take for controlling levels of employee engagement in their companies.  This should be good news.  But, if almost half of CEOs believe they are the prime mover of employee engagement in their companies, why are so many not doing more to drive it?  Our analysis of 2.1 million employee engagement surveys from 10,000 employers (in partnership with Quantum Workplace) does indeed show that senior leaders influence employee engagement slightly more than direct managers in that they do set the tone, embody the values, and convey the culture.  But it would be a mistake for CEOs not to hold middle managers equally responsible for driving up levels of employee engagement, just as it would be a mistake to not hold all employees responsible for keeping themselves engaged.  The fact that only 16% of those who report to CEOs agree that CEOs are the primary drivers of engagement suggests that lower-level leaders are more than ready to share the responsibility.

“People Leave Managers, Not Companies”…Up to a Point

I  have facilitated too many post-survey action planning sessions in which middle managers, after identifying the corrective steps they can and must take, come to the inevitable point where they say “we can only do so much.”  Some things, they correctly point out, only CEOs, their boards, and more senior leaders control and decide–things like clarification of company direction, overall staffing/workload levels, work/life policies, general pay/benefits, recognition budgets, and many other vital levers of employee engagement.  It’s up to those of us in HR-related roles to help them see the connections and trust us to advise them on the truest path to engaging leadership.

So, What Do You Think?

I welcome your responses to these questions:

  • Who truly influences levels of employee engagement more in your company–senior leaders or direct managers?
  • What actions should HR leaders take to help C-suite leaders sort out which employee engagement initiatives to take?

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