The Hidden Drivers of Leader Engagement Part I

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Copyright ©2015 Organizational Intelligence Institute. All rights reserved. Organizational Intelligence Institute (www.oi-institute.com) – a Skyline Group company is a human capital research organization dedicated to advancing evidence-based management, people development, and organizational effectiveness. The sample population for the study was drawn from an email distribution list obtained from the Skyline Group International and the Organizational Intelligence Institute. The information and commentary contained in this report reflect the research and studied opinions of the Organizational Intelligence Institute and principal researcher. Participating companies may reproduce and distribute this report to their employees for internal management purposes only. Other individuals or groups from non-participating companies, including external consultants, may not be given copies of this report nor access to any other Organizational Intelligence Institute reports or conference materials. Fulltime and university-based academicians and scholars may receive complimentary access to this report provided that they do not have a conflicting interest and agree not to distribute the report to any outside parties. For permission requests, send an email to the principal researcher at [email protected] Principal Researcher & Author: Dr. Salvatore Falletta, EVP & Managing Director, Organizational Intelligence Institute – a Skyline Group company.

INTRODUCTION In a recent report published by The Economist, it was revealed that leader engagement levels are directly related to workforce engagement levels. According to the report, 4 in 5 senior leaders consider employee engagement to be a risk factor for business. Yet, the report also indicated that only 1 in 10 senior leaders are highly engaged and willing to go the extra mile for their organizations. Such findings strongly suggest that the “writing is on the wall,” as only engaged leaders can enable employee engagement at all levels. After all, leaders have a privileged role in designing and ratifying the organizational policies and practices and engaging others, which in turn has a cascading and multiplier effect throughout the organization. However, organizations tend to employ a "one-size-fits-all' approach when it comes to maximizing the engagement and performance of various employee groups—including leaders and high-potentials.

EXPLORING THE FULL SPECTRUM OF LEADER ENGAGEMENT AND DISENGAGEMENT To explore full spectrum of leader engagement in terms of its underlining causes and impact on people and organizations, the Organizational Intelligence Institute is conducting the research in two parts.

PART I – THE HIDDEN DRIVERS Part I focuses on the hidden drivers of leader engagement while elucidating the pitfalls of a “one-size-fits-all” approach in terms of ideally maximizing leader engagement in the organizations. It also: 1.

Makes the business case for workforce segmentation and HR analytics capabilities and

2.

Demonstrates the value of measuring workforce engagement on a regular cadence.

PART II – THE REALITY Part II of the study will identify the specific behaviors associated with disengaged leaders and explore how pervasive these behaviors are in organizations. It will also: 1.

Demonstrate the critical relationship between leader disengagement, ineffective leadership behaviors, and employee engagement as well as its impact on the business and

2.

Offer specific recommendations and practical strategies on how to help disengaged leaders in the workplace.

PURPOSE & METHODOLOGY The purpose of the Leader Engagement Survey was to gain insight into the primary drivers (i.e., factors, variables, and value propositions) that affect leader engagement. A corollary purpose of this research is to examine how these engagement drivers might vary by various demographic variables and workforce segments. The sample population for the study was drawn from an email distribution list obtained from the Organizational Intelligence Institute. An email invitation with an embedded URL to the survey was sent to a broad cross section of business leaders representing companies in a variety of industries. The survey included 14 core items that measured engagement by various talent segments, organizational practices implemented to increase engagement, and the factors and variables that matter most to leaders in general, emerging leaders, and high-potentials. Questions about the career goals, aspirations, and ambitions of participants were also included on the survey along with select demographic questions. A targeted, snowball sampling approach was used to promote and generate interest in the survey. The web-based survey was sent to several LinkedIn groups dedicated to employee engagement, human capital analytics, workforce and organizational surveys, and talent management. Two email reminders were sent in an effort to increase participation. In total, 159 participants completed the survey.

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INTERPRETING THE RESULTS The findings and recommendations in this study are based on data collected from a large sample of business leaders from a diverse set of companies. In interpreting and applying these results, the reader should keep the following considerations or caveats in mind. The observations and insights that follow are based on a non-probability sample of business leaders and should be interpreted with caution. However, the Organizational Intelligence Institute believes that the conclusions in this study are likely to be practically generalizable for the following reasons: •

Of the 159 respondents, 156 were from distinct companies, representing 29 different industries (refer to Exhibit 3)

•

Of the 156 companies, over 51.6% can be characterized as “large” Forbes 2000 companies ($1 billion to $4.99 billion) and Fortune 500 companies ($5 billion +). Several company participants that are considered “small” (32.7%) and “medium” (15.7%) in terms of annual gross revenue (see Exhibit 5)

•

In terms of international participation, 17% of respondents were from global firms that are headquartered outside of the United States (see Exhibit 6)

•

Respondents varied in terms of job and position level and business unit/functional/departmental roles and responsibilities (see Exhibit 2 and 4, respectively)

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KEY FINDINGS & INSIGHTS Higher Engagement Levels Reported for Leaders and High-Potentials •

Respondents rated engagement levels for leaders higher than those of employees as a whole. This finding is promising given the connection between leader engagement and leader effectiveness— which in turn has a cascading and multiplier effect throughout the companies they serve.

Most Challenging Group to Move the Needle on Engagement •

While higher engagement levels for leaders were shared, people managers and organizational leaders are considered the most difficult groups on which to increase engagement. This presents a key business challenge for companies that might have a disproportionate number of disengaged leaders among their ranks.

Who Owns Employee Engagement? •

Respondents indicated that senior management (34%), the CEO (22%), and first-line managers are primarily responsible for employee engagement

•

Only 7% (n = 11) of respondents believe that HR, talent management, training and learning, and OD and effectiveness own employee engagement

Most Frequently Prescribed Strategies 1.

Leadership development/training

2.

Core values communication

3.

Strategy, goals, and objective alignment

4.

Employee communication improvements

5.

Employee learning and development opportunities Note: The most commonly prescribed strategies seemed to be aligned with and appropriate for increasing and sustaining engagement for employees in general but will likely miss the mark for critical talent segments.

Top Engagement Drivers for All Respondents 1.

Core values of the company

2.

Relationship with immediate manager/leaders

3.

Organizational structure

4.

Trust and integrity in the leadership

5.

Pride about the company

Top Engagement Drivers for High Potential Leaders: Not the Usual Suspects! 1.

Organizational leadership opportunities

2.

Advancement and promotion opportunities

3.

Compensation (base pay, bonuses, commission)

4.

Organizational culture

5.

Job fit

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What Matters Most for Respondents with C-Level Aspirations and High Achievement/Ambition Orientation 1.

Organizational leadership opportunities

2.

Advancement and promotion opportunities

3.

Compensation (base pay, bonuses, commission)

4.

Executive visibility

5.

Decision making authority/decision rights

The Business Case for Workforce Segmentation, HR Analytics, and Employee Surveys •

The 80/20 Rule suggests that 80% of the business results are directly tied to the efforts of a company’s top 20%

•

If human capital is indeed a company’s greatest source of strategic competitive advantage, the mandate is clear:

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o

Segment your workforce and determine what matters most for critical talent segments

o

Develop robust workforce, talent, or HR analytics capabilities

o

Measure workforce engagement via employee/organizational surveys on a regular cadence

o

Avoid a “one-size-fits-all” approach and tailor strategies to each employee’s unique strengths, motivations, career aspirations, and values

CHARACTERISTICS OF RESPONDENTS The survey was completed by 159 respondents. These participants reported that they had worked in a business industry for an average of 22.3 years with a range of 1 to 50 years. The majority of respondents identified themselves as either “Generation X” or “Baby Boomer” in terms of generational cohort. Respondents were relatively balanced in terms of gender (i.e., nearly 52% identified as female and 48% identified as male). The majority of respondents hold graduate degrees (56.6% hold a master’s degree and nearly 14% a doctoral degree), while a little over 21% hold a bachelor’s degree (see Exhibit 1 below).

EXHIBIT 1: GENERAL CHARACTERISTICS: GENERATIONAL COHORT, GENDER, AND EDUCATION

Roughly 43% of respondents reported that they were a first-line manager/supervisor or individual contributor. A little more than 30% of respondents identified themselves as a VP or director, and 22% identified themselves as CEO/president, C-level executive, or EVP/SVP. This distribution reflects most organizational hierarchies in companies today (see Exhibit 2 below).

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EXHIBIT 2: JOB LEVEL OF RESPONDENTS

Source: Organizational Intelligence Institute, 2015

The 159 participants represented 29 industries (see Exhibit 3 on the following page). Additional characteristics of the respondents are summarized in Exhibits 4, 5, and 6, respectively.

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EXHIBIT 3: PRIMARY INDUSTRY OF RESPONDENTS

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Exhibit 4 shows the frequency distribution of respondents’ primary business unit, function, or department.

EXHIBIT 4: PRIMARY BUSINESS UNIT/FUNCTION/DEPARTMENT

Source: Organizational Intelligence Institute, 2015

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In addition to industry, the gross revenue and size of participating companies varied significantly, suggesting a broad appeal and interest in the topic of leader engagement (see Exhibit 5 below).

EXHIBIT 5: REVENUE & SIZE OF PARTICIPATING COMPANIES

Source: Organizational Intelligence Institute, 2015

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In terms of geographical structure, over 53% of the respondents characterized their companies as “global” or “multi-national” corporations. However, the participating companies are largely (83%) U.S.-based (see Exhibit 6 below).

EXHIBIT 6: GEOGRAPHIC STRUCTURE & HEADQUARTERS OF PARTICIPATING COMPANIES

Source: Organizational Intelligence Institute, 2015

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RESULTS Participants were asked to estimate the overall engagement levels of various workforce segments at their respective companies (see Exhibit 7 and 8). 

All Employees: All employees in the organization (i.e., company-wide engagement).



Leaders: Individuals who currently hold an organizational leadership role and manage a business unit, function, and/or department, including mission and strategy ownership, people management responsibilities, fiscal/budgetary accountabilities, and decision rights.



High-Potentials: Individuals with the talent (innate characteristics and learned skills), ability, and desire to rise to and succeed in a more senior role.

Approximately 42% of respondents rated engagement levels for all employees at their company as “passively or moderately engaged,” whereas 55.3% rated all employees more favorably as either “engaged” (48.4%) or “actively engaged” (6.9%). Respondents rated engagement levels for organizational leaders (81.1%) and high-potentials (81.8) significantly higher than employees as a whole.

EXHIBIT 7: ENGAGEMENT LEVELS BY SELECT WORKFORCE SEGMENTS

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Source: Organizational Intelligence Institute, 2015

Respondents were also asked to rate their own individual engagement level (see Exhibit 8 below). Similar to the engagement levels reported on leaders and high-potentials, respondents reported higher engagement than employees as a whole at their company.

EXHIBIT 8: ENGAGEMENT LEVELS OF INDIVIDUAL RESPONDENTS

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EXHIBIT 9: WHO OWNS EMPLOYEE ENGAGEMENT Arguably, everyone in an organization is responsible for employee engagement, including individual employees. However, respondents indicated that senior management (34%), the CEO (22%), and first-line managers (22%) are ultimately responsible for engagement in their company.

Source: Organizational Intelligence Institute, 2015

Interestingly, less than 7% (n = 11) of all respondents believe that human resources/talent management and training/learning/organization development/effectiveness professionals are primarily responsible for engagement in their company, which is consistent with research conducted by The Economist (Bolchover, 2011).

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EXHIBIT 10: MOST CHALLENGING GROUP TO MOVE THE NEEDLE ON ENGAGEMENT Over 80% of all respondents indicated that people managers and organizational leaders (49.1% and 31.4%, respectively) are the most challenging groups in which to increase engagement (see Exhibit 10). Nearly 28% of respondents identified critical or scarce-skilled employees (28%), whereas approximately 20% identified “entry-level workers” as a difficult group (see “Other”). High-potential and high-performers are considered a relatively easier group to move the needle on engagement.

Source: Organizational Intelligence Institute, 2015

Such results are not surprising when you consider that people managers and organizational leaders are increasingly being asked to do more with less while expected to maximize the engagement and performance of others. Theresa Wellbourne, a senior researcher for the University of Southern California’s Center for Effective Organizations (CEO), suggests that leaders are arguably unrecognized victims of the protracted recession and have been suffering from suboptimal energy for quite some time (2011). When such environmental and organizational conditions exist, leaders may find it difficult to raise and sustain their enthusiasm, energy, and effort—which can lead to burnout, lack of well-being, and disengagement (Macey, Schneider, Barbara, & Young, 2009).

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TABLE 1: AREAS OF FOCUS FOR ACTION PLANNING & CHANGE When it comes to action planning and change associated with engagement efforts, respondents’ identified leadership development, core values communication, employee communication, employee learning and development, and coaching (see Table 1) as the most frequently prescribed strategies and solutions at their company. Nearly 31% of respondents reported strategy alignment as a specific area of focus. This is consistent with previous research conducted by the Organizational Intelligence Institute and other think tanks that suggest that highperforming companies are beginning to rethink and retool their workforce surveys and engagement efforts with an increased focus on strategy alignment and execution. Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

Most Frequently Prescribed Strategies and Solutions Leadership development/training Core values – communication Strategy, goals, and objective alignment Employee communication improvements Employee/learning and development opportunities Coaching Career paths for people managers and individual contributors Management development/training Performance review, evaluation and/or management improvement/enhancements Development planning Culture change - Incremental Cross-team/functional collaboration efforts Decision-making process improvements/redesigns Hire better and smarter talent - employees 360 degree feedback Employee on-boarding /new hire programs Succession management/talent reviews for top talent Culture change - transformational Employee branding/employer of choice efforts Employee/organizational surveys Base pay – market adjustments Knowledge sharing and knowledge management initiatives Organization design/redesign Team-building/group-process interventions Total rewards (total compensation & benefits) redesign/improvements Work-life balance initiatives Computer and other technology enhancements for employees Mentoring (formal and informal) programs Other Core values—redefining/re-conceptualizing Job design and enrichment Redefining the job title structure, grade/band levels, and roles/responsibilities Use of external consultants (e.g., strategy consulting, change management) Executive retreats/off-sites Hire better and smarter talent—leaders/executives Corporate restructuring Workload management initiatives Decision rights realignment (are the right decisions are made by the right people) HR tools and system upgrades/implementations

%

N

34.0% 31.4% 30.8% 26.4% 25.8% 24.5% 17.6% 17.6% 15.1% 14.5% 13.2% 11.3% 11.3% 9.4% 8.8% 8.8% 8.8% 8.2% 8.2% 8.2% 7.5% 7.5% 7.5% 6.9% 6.9% 6.9% 6.3% 6.3% 6.3% 5.0% 5.0% 5.0% 5.0% 4.4% 4.4% 3.1% 3.1% 2.5% 2.5%

54 50 49 42 41 39 28 28 24 23 21 18 18 15 14 14 14 13 13 13 12 12 12 11 11 11 10 10 10 8 8 8 8 7 7 5 5 4 4

* Total = 159 *The “Total” represents the total number of individual respondents. Participants were permitted to select up to five areas of focus.

Source: Organizational Intelligence Institute, 2015

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ENGAGEMENT DRIVERS: THE USUAL SUSPECTS What are the “real drivers” of leader engagement (see Table 3) and how might they differ from the variables that influence employee engagement in general? There are countless factors, variables, and value propositions that influence employee engagement. For example, The Conference Board conducted a meta-analytic study that identified the most common engagement drivers in the research literature (Gibbons, 2006; Ray, Powers, & Stathatos, 2012). As a result of their research, the following 11 drivers are considered the most common and impactful across all of the studies examined: 1.

Trust and integrity

2.

Nature of the job

3.

Line of sight between individual performance and company performance

4.

Career growth opportunities

5.

Pride about the company

6.

Coworker/team members

7.

Employee development

8.

Personal relationship with one’s manager

9.

Pay fairness

10. Personal influence 11. Well-being

Other popular engagement drivers, in no particular order of importance, include: •

Core values of the company

•

Corporate social responsibility

•

Employment brand/employer of choice

•

Diversity and inclusion

•

Immediate manger/supervisor quality

•

Job security

•

On-going feedback

•

Recognition

•

Respect

•

Tools and resources

•

Work-life balance

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THE REAL DRIVERS OF LEADER ENGAGEMENT This study included 46 drivers from the employee engagement literature. Respondents were asked to identify the drivers with the biggest impact on high-potential leader engagement at their company. The factors identified by respondents differ from the usual suspects when you examine the top five. While the usual suspects do matter, they appear to serve as secondary drivers for this critical talent segment. The factors that matter most for highpotential leaders include: (1) organizational leadership opportunities, (2) advancement and promotion, (3) compensation, (4) culture, and (5) job fit. Interestingly and contrary to popular belief, compensation is a relatively important engagement driver for all talent segments. According to a recent SHRM research report—Employee Job Satisfaction and Engagement: The Road to Economic Recovery—compensation has been one of most consistent contributors of job dissatisfaction and disengagement for the last 11 years (Lee, 2014). Other important engagement drivers for high-potential leaders include: recognition, executive visibility, company growth and performance, decision-making latitude, team work environment, and access to a budget or fiscal resources to successfully perform their jobs (see Table 2).

TABLE 2: ENGAGEMENT DRIVERS FOR HIGH-POTENTIAL LEADERS Rank 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15

What Matters Most for High-Potential Leaders Organizational leadership opportunities (opportunities to lead a business unit, function, or department with significant mission and charter ownership, human resource responsibility, fiscal/budgetary accountability) Advancement & promotion opportunities Compensation (base pay, bonuses, commission) Organizational culture Job fit (the job fits your skills, interest, preferences, and personality) Line-of-sight between individual performance and company performance * Trust & integrity in the leadership * Learning and development opportunities * Relationship with immediate manager/leader * Recognition Executive visibility Company growth and performance Decision making authority/decision rights Collaborative/team work environment Access to budget/fiscal resources

%

N

46.5%

74

40.3% 39.0% 37.1% 34.0% 32.1% 28.9% 28.3% 24.5% 22.0% 20.1% 18.2% 16.4% 14.5% 12.6%

64 62 59 54 51 46 45 39 35 32 29 26 23 20

**Total 159 *Engagement drivers that are consistent with The Conference Board studies. **The “Total” represents the total number of individual respondents. Participants were permitted to select up to ten drivers.

Source: Organizational Intelligence Institute, 2015

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TABLE 3: ENGAGEMENT DRIVERS FOR INDIVIDUAL RESPONDENTS Participants were asked to identify the drivers that have the biggest impact on their own engagement. The top 15 drivers (in rank order) for all respondents are presented in the table below. While the usual suspects are evident here for all individual respondents as a whole, the mix of drivers differ significantly when you examine the data by other workforce segments (e.g., see Table 4 on the following page). Rank

%

N

1

Core values of the company

All Respondents

40.3%

64

2

Relationship with immediate manager/leader *

38.4%

61

3

Organizational structure (how the organization is designed, levels, roles, span of control)

34.6%

55

4

Trust and integrity in the leadership *

32.7%

52

5

Pride about the company *

29.6%

47

6

Senior leadership quality

28.9%

46

7

Organizational culture

27.7%

44

8

Nature of the job/work itself *

23.9%

38

9

Company growth and performance

23.3%

37

10

Work–life balance

21.4%

34

11

Decision making authority/decision rights

20.8%

33

12

Diversity and inclusion

19.5%

31

13

Learning and development opportunities *

18.2%

29

14

Risk taking

16.4%

26

15

Advancement and promotion opportunities

14.5%

23

**Total 159 *Engagement drivers which are consistent with The Conference Board studies. **The “Total” represents the total number of individual respondents. Participants were permitted to select up to ten drivers.

Source: Organizational Intelligence Institute, 2015

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TABLE 4: ENGAGEMENT DRIVERS THAT MATTER MOST FOR “ASPIRING LEADERS” In this study, participants were asked to whether they aspire to assume a senior executive or C-level position in their career. They were also asked to complete a brief, five-item Achievement/Ambition Scale that was developed by a team of psychological researchers at the University of Pennsylvania (Duckworth, Peterson, Matthews, & Kelly, 2007). The data were cross-tabulated and analyzed to identify respondents with both C-level aspirations and a high ambition and achievement orientation (N = 67). As expected, this group of respondents selected a distinct set of engagement drivers compared to respondents (see Table 4 below). It is important to note that there is no way of knowing whether any of the individual respondents in the study are considered high-performers and/or high-potentials at their companies. Nonetheless, the results demonstrate that engagement drivers are likely to differ by various talent segments who share similar characteristics, values, and career goals and aspirations. Rank

%

N

53.7%

36

2

Organizational leadership opportunities (i.e., opportunities to lead a business unit, function, or department with significant mission and charter ownership, and human resource responsibility, fiscal/budgetary accountability) Advancement and promotion opportunities

49.3%

33

3

Compensation (base pay, bonuses, commission)

46.3%

31

4

Executive visibility

41.8%

28

5

Decision making authority/decision rights

38.8%

26

6

Job title (EVP, VP, director)

34.3%

23

7

Job fit (the job fits your skills, interest, preferences, and personality)

31.3%

21

8

Risk taking

29.9%

20

9

Company reputation/prestige/brand

26.9%

18

10

23.9%

16

11

Personal brand opportunity (i.e., opportunity to leverage an external brand through company affiliation as a thought leader or recognized expert in one’s industry or profession) Organizational structure (how the organization is designed, levels, roles, span of control)

19.4%

13

12

Personal influence *

17.9%

12

13

Organizational culture

14.9%

10

14

Learning and development opportunities *

13.4%

9

15

Recognition

10.4%

7

1

Respondents with C-Level Aspirations and High Achievement/Ambition Orientation

**Total 67 *Engagement drivers which are consistent with The Conference Board studies. **The “Total” represents the total number of individual respondents. Participants were permitted to select up to 10 Drivers. Source: Organizational Intelligence Institute, 2015

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WHO OR WHAT HOLDS THE KEY TO YOUR HAPPINESS AT WORK? In terms of identifying the factors that contribute to engagement at work, participants were asked to estimate and assign a percentage to a short list of key variables (see Table 5 below). The total percentage for each variable had to equal 100%.

TABLE 5: AVERAGE PERCENTAGE (%) ATTRIBUTED (ALL RESPONDENTS) All Respondents

Average %

Your immediate manager/supervisor

33.6%

Organizational factors (policies, practices, processes outside of your immediate manager’s control)

27.3%

Yourself

23.6%

Your business unit and/or functional leader other than the CEO

12.1%

CEO/president

3.4% N = 159

100%

On average, respondents estimated 33.6% of their overall engagement at work is connected to their immediate manager or supervisor, which is consistent with prior research that suggests that anywhere between 30% to 50% and in some cases, up to 70% of employee disengagement and/or actual attrition can be attributed to poor managerial and leadership quality, behavior, and effectiveness (e.g., Buckingham & Coffman, 1999). However, much of the research on this topic has been conducted by employee survey consulting firms, all of whom have a vested interest in placing the blame of employee disengagement squarely on the shoulders of employees’ immediate or direct managers. After all, there is a multi-billion dollar leadership and management development industry that depends on perpetuating this notion. That said, to what extent do organizational factors come into play? In this study, all respondents on average estimated 27.3% of their engagement is related to organizational factors (i.e., organizational policies, practices, and processes) that are outside of their immediate manager’s control. The average percentage was even larger for respondents with C-level level aspirations and a high achievement and ambition orientation. Respondents in this group assigned much more weight to organizational factors (41.3%)—thereby suggesting that their engagement or disengagement has little to do with their personal relationship with their immediate manager or supervisor (see Table 6).

TABLE 6: AVERAGE PERCENTAGE (%) ATTRIBUTED (“ASPIRING LEADERS”) Respondents with C-Level Aspirations and High Achievement/Ambition Orientation

Average %

Organizational factors (policies, practices, processes outside of your immediate manager’s control) Yourself

41.3%

Your immediate manager/supervisor

14.9%

Your business unit and/or functional leader – other than the CEO

2.4%

CEO/president

39.3%

2.1% N = 67

100%

To be fair, however, many companies today are struggling with a number of business constraints (structural, cultural, and fiscal) when it comes to designing and implementing customized strategies to attract, develop, and retain the best and the brightest. For example, there may be structural constraints in which an organization is relatively flat; hence, fewer advancement and promotion opportunities are available for high-potential leaders waiting in the leadership pipeline.

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CLOSING THOUGHTS High-performing companies over the last several years have been increasingly measuring and monitoring their employee engagement levels, as a growing body of research has demonstrated that having a highly-engaged workforce not only maximizes a company’s investment in human capital and improves organizational effectiveness (Harvard Business Analytics Service, 2013). However, it’s been quite fashionable and arguably self-serving for the human resource industry to contend that the primary drivers of employee engagement are all about the relationship with one’s immediate manager, co-worker or team member quality, employee learning and development opportunities, and the like. While these usual suspects have had a significant impact on employee engagement as a whole, they tend to miss the mark for critical talent segments. In their groundbreaking book, Workforce of One: Revolutionizing Talent Management Through Customization, Susan Cantrell and David Smith argue that companies serious about human capital and talent management need to replace generic, one-size-fits-all practices with strategies tailored to each person’s unique strengths, motivations, career aspirations, and values (2010). This research provides some tentative support for a set of leader engagement drivers that differ from the usual suspects and conventional wisdom. It also provides a compelling business case for workforce segmentation and measuring engagement on a regular cadence in order to pinpoint the “real drivers” of engagement by critical talent segments (i.e., the top 20% of talent that drives 80% of your company’s results) as well as to facilitate action planning and organizational change. As a result, companies are better able to take a closer look at the barriers of engagement and how to overcome them, and in turn make smarter human capital investments while avoiding a one-size-fits-all approach.

OUR DEFINITION & APPROACH TO EMPLOYEE ENGAGEMENT There are a variety of competing definitions of employee engagement—but in many ways they are fundamentally similar. Most definitions include some combination of and emphasis on: work passion, enthusiasm, motivation, commitment, job satisfaction, employee alignment with organizational goals, and a willingness to exhibit discretionary energy and effort (Vance, 2006; Macey, Schneider, Barbera, & Young, 2009). Along these lines, our definition of employee engagement is: “Employee engagement involves the cognitive, emotional, and behavioral relationship employees have with their jobs and organizations, and effort and enthusiasm they put into their daily work (i.e., the extent to which employees contribute their discretionary energy and effort on behalf of the organizations they serve).” Source: Falletta, S. (2008). Organizational Intelligence Surveys. T&D.

Our approach to measuring employee engagement considers the concept of engagement as a desired state (Macey & Schneider, 2008). Therefore, employee engagement is merely a means to an end and serves as a proxy for improving individual and organizational effectiveness and performance and achieving other important business outcomes (e.g., reduced turnover, customer satisfaction). In our view, employee engagement is a result of organizational factors (e.g., organizational policies and practices) that extend beyond the popular notion that it’s all about the behavior and effectiveness of individual leaders and managers. As a whole, all of these drivers precede the state of engagement, which in turn enables individual and organizational performance (Falletta, 2008).

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A FRAMEWORK FOR MEASURING EMPLOYEE ENGAGEMENT The Organizational Intelligence Model below is a diagnostic framework that can be used in the design and interpretation of most employee and organizational survey efforts. The OI model includes 11 variables and depicts a top-down causal chain, making some tentative assertions with respect to cause and effect. The variables in the upper part of the model, such as environmental inputs, affect the organization from the outside. Within the organization, the strategic drivers (i.e., leadership, strategy, and culture) affect key indices that represent organizational capability and execution. These include the organization’s structure and decision rights, information and technology, quality of direct managers, measures and rewards, and growth and development opportunities. The five key indices directly influence employee engagement and in turn the performance outputs variable (i.e., the key indices serve as the primary drivers of employee engagement and individual and organizational performance).

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INTERESTED IN LEARNING MORE? If you or your organization is interested in learning more about the Leader Engagement Surveys and how your organization can measure and maximize employee and leader engagement, please contact Stacy Schamberger, EVP, Business Development at [email protected].

REFERENCES Anonymous (2013). The impact of employee engagement on performance. Harvard Business Review Analytics Services. Boston, MA: Harvard Business School Publishing. Bolchover, D. (2011). Re-engaging with engagement. The Economist: Economist Intelligence Unit. Buckingham, M. and Coffman, C. (1999). First, Break All the Rules. What the World’s Greatest Managers Do Differently. New York, NY: Simon & Schuster Cantrell, S. & Smith D. (2010). Workforce of One: Revolutionizing Talent Management Through Customization. Boston, MA: Harvard Business Press. Duckworth, A.L., Peterson, C., Matthews, M.D., & Kelly, D.R. (2007). Grit: Perseverance and passion for long-term goals. Journal of Personality and Social Psychology, 9, 1087-1101. Falletta, S. V. (2008). Organizational intelligence surveys. T&D Magazine, June, 52-58. Gibbons, J. (2006). Employee engagement: A review of current research and its implications. The Conference Board, Report No. E-0010-06-RR. Lee, C. (2014). Employee Job Satisfaction and Engagement: The Road to Economic Recovery. A SHRM Research Report by The Society for Human Resource Management. Macey, W. H. and Schneider, B. (2008). The meaning of employee engagement. Industrial and Organizational Psychology, 1, pp. 3–30. Macey, W., Schneider, B., Barbera, K., & Young, S. (2009). Employee Engagement: Tools for Analysis, Practice, and Competitive Advantage. West Sussex, UK: Wiley-Blackwell. Ray, R., Powers, B., & Stathatos, P. (2012). Employee engagement: What works now? The Conference Board, Report No. R-1504-12-RR. Wellbourne, T. (2011). Disengaged at the top: Leaders are unrecognized victims of the recession. TLNT: The Business of HR Online. Vance, R. J. (2006). Employee engagement and commitment: A guide to understanding, measuring and increasing engagement in your organization. Alexandria, VA: SHRM Foundation.

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SKYLINE GROUP INTERNATIONAL Skyline Group International is a comprehensive global consulting firm that provides workforce research, surveys, and assessments, high impact executive coaching, organizational effectiveness consulting, and scalable coaching solutions for each stage of the employee work-cycle.

ORGANIZATIONAL INTELLIGENCE INSTITUTE The Organizational Intelligence Institute is the human capital research and R&D division of the Skyline Group dedicated to advancing evidence-based management, people development, and organizational effectiveness. At the Organizational Intelligence Institute, we partner with the world’s leading companies and evidence-based thought-leaders to: •

Conduct provocative and leading-edge research on best-practices and next-practices

•

Bridge the proverbial gap between research and practice

•

Challenge conventional wisdom as well as management fads with an evidence-based approach

•

Critically discuss fringe topics, perspectives, and ideas which may not be widely shared nor popular among the mainstream management, human resource, and training and learning community

Our Commitment Unlike other member-based human capital research, benchmarking, and advisory consortia, research participants will never pay for our Strategic Research Reports and insights nor is an annual membership fee required. We do charge a report fee for non-participating individuals and organizations however. The Organizational Intelligence Institute is fully funded and sustains its human capital research initiatives through our workforce surveys, assessments, and analytics consulting practice.

PRINCIPAL RESEARCHER & AUTHOR Dr. Salvatore Falletta is EVP and Managing Director for the Organizational Intelligence Institute - the R & D division of Skyline Group International. Under Sal's leadership, the Organizational Intelligence Institute specializes in leading-edge human capital research, web-based employee and organizational surveys, HR analytics, 360 degree feedback systems, leadership and management assessments, HR strategy and innovation, and learning measurement and evaluation. Sal also serves as Associate Professor for Human Resource Development at Drexel University and was formerly the President and CEO of Leadersphere, Inc - an HR consulting firm which is now the Organizational Intelligence Institute - a Skyline Group company. Prior to the Organizational Intelligence Institute and Drexel, Sal was Vice President and Chief HR Officer for a Fortune 1000 firm based in the Silicon Valley, CA, and has held management positions in human resources, training and learning, and OD at several best-in-class companies, including Nortel Networks, Alltel, Intel Corporation, SAP AG, and Sun Microsystems. While at Intel, he managed the global employee survey program, performed HR analytics projects, and led corporate HR analytics and strategy efforts. He also led the training measurement and evaluation function at Nortel Networks. Sal is an accomplished speaker, researcher, and author. He frequently presents at national and international conferences. He is currently writing a book on Workforce Surveys and Analytics. He holds a doctoral degree with a specialization in human resource development and organizational behavior from North Carolina State University. He can be reached at [email protected]

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