Measuring the Value of a More Engaged Workplace

Seven critical factors for optimizing employee experience

By Dr. Patrick McHugh, Co-Academic Director of the IE Brown Executive MBA program

Customer experience isn’t everything.

We’ve been optimizing customer experience ever since the first customer left the first trading post in search of another seller of beaver pelts. Customers are, after all, the most evident contributors to the success of the business. So we optimize.

Employees, however, have always been different. They’re viewed as varying degrees of replaceable or expendable — a cost of doing business. Their employment is a sort of gift. But these are the very people we count on to craft those perfect customer experiences. They’re the people tasked with making our products sing and our services hum seamlessly. Are these employees really engaged in the work we need them to do? A recent Gallup report offers a definitive “no.”

The annual State of the Global Workplace survey says 85% of employees are not engaged in — or are actively disengaged from — their work. It’s a statistic that cuts deeply across industries, across the org chart, and perhaps across your own organization.

Of course, many companies grow without devoting significant or thought resources to employee experience. So, the next logical question is whether engaging employees makes a measurable difference. While a strong correlation might seem less obvious, and less easy to analyze, recent research delivers a definitive, measurable “yes.”

In “The Employee Experience Advantage,” an analysis of 250 organizations shows that those that invested in employee experience saw nearly three times the revenue and four times the profit per employee, compared to organizations that did not. That’s a scalable advantage.

So what’s happening in those organizations that optimize employee engagement? And what is happening in those that do not? For insights, let’s turn to research recently conducted by Marlene Grenon, MD, Associate Professor of Surgery, University of California, San Francisco, and Rebecca Kline, General Manager of Growth at PagerDuty.

As members of the IE Brown Executive MBA Class of 2018, for their key reflection project, 7 Recommendations for a More Engaged Workplace, they conducted research that included interviews with more than 200 employees and business leaders. Their goal: to identify key factors involved in employee disengagement and create a framework to address this issue.

In addition to their primary research, Grenon and Kline drew on literature from related neuroscience, engagement, and workplace research and reviewed the work of prominent thought leaders including Drs. Daniel Cable, Wilmar Schaufeli, Sabine Sonnentag, Emma Seppala and others. Then they examined the societal, generational, and business trends that contributed to negative workplace outcomes for individuals, businesses, and society.

What Grenon and Kline discovered was a growing tension between the old scientific management techniques — the standardized performance metrics, incentives, punishments, and promotions pioneered in the Industrial Revolution — and what is needed today. Attempts to adapt these antiquated approaches to the modern workplace leave managers falling further and further from the effective motivators needed in today’s workforce.

They concluded, “feeling valued,” — alongside communication and transparency, flexibility, innovation and caring — are the keys to optimizing employee experience. Based on their findings, Grenon and Kline also offered seven evidence-based leadership approaches that can help shift an organization’s focus to successful employee engagement:

1. Offer Psychological Safety 

Today’s workers perform best when their leaders encourage them to do so. When you show confidence in employee abilities and what they’re capable of achieving, they bring their A-game. Creating psychological safety means fostering an environment where people are comfortable making mistakes and stating their limits, and not punished for doing either.

Individualized approaches to onboarding can initiate this environment for each employee, and are bolstered by offering opportunities for identity expression, such as self-reflective titles. Diversity and inclusion efforts can help ensure that diverse characteristics and unique strengths are appreciated and tapped into, creating feelings of psychological safety across the full team.

2. Support the Search for Meaning

Modern employees find satisfaction in their work when they can find meaning in that work. That doesn’t mean your organization has to be a nonprofit. It does mean that communicating your mission, vision, values and strategy can help workers feel a part of something larger than their day-to-day tasks.

Support the development of each employee’s “professional identity,” which is a source of well-being, esteem and pride. And actively foster opportunities for employees to experience the value of their work outside of their immediate domain. Programmers, for instance, might go on visits with the customers who benefit from their work.

3. Work on Serious Play

In “Alive at Work,” author Dan Cable suggests that organizations elevate employee engagement by facilitating “serious play” or “freedom in the frame.” By offering employees a problem that needs to be solved, some parameters, and a free-to-fail environment, organizations can encourage creativity and innovation.

In this play zone, where workers can grow and experiment while fostered by a common goal and mission, employers can further support their desire to be a part of something larger than themselves.

4. Encourage the Whole Self

An employee feels valued within an organization when they are recognized as a whole person, not just as a “sales manager” or a “customer service rep.” Mentoring and career development contribute heavily to workplace satisfaction.

Personalized workspaces can contribute to a sense of well-being and being valued, as well. People want to work in, and are more engaged with, spaces that celebrate their individuality as well as their membership in their organization. The need for individuality can also be fulfilled by offering the flexibility for employees to pursue their outside lives, whether that’s the life of a parent or an avid surfer.

5. Promote Healthy Behaviors

When leadership clearly communicates the importance of a healthy workplace, it aligns its values with that of its employees. And to modern employees, aligned values are everything.

Millennials are especially interested in programs that include mental health support and promote physical health, from gym membership and weekly meditation sessions to healthy snacks and the option for standing desks. Employee Assistance Programs (EAPs), such as health plans with 24/7 online medical hotlines, can support this effort as well.

6. Support Transformational Leadership Styles

Transformational leaders are change makers who work by inspiring commitment instead of by sheer force of will. They lead by creating a vision and then influencing and empowering employees to do what’s needed to make the vision a reality. To demand change is to imply workers might not be personally aligned with the organization’s purpose and must simply submit. But to inspire them to engage, you inspire them to commit.

It’s not enough, however, to choose those who seem like natural leaders. Today, it’s important to select and train managers who care about the people they lead and know how to lead them. Provide professional development and education to all managers on critical communications concepts such as verbal persuasion, confidence building, psychological safety, and 360-degree feedback.

7. Be Agile and Creative

As Agile methodologies infiltrate every corner of many organizations, a general shift in workplace culture is taking hold, one on continuous learning and of Lean adaptation. A willingness to not just solicit and listen to employee feedback, but to enact real change as a response, is now a workplace expectation.

Demonstrate your commitment to improvement with work and well-being surveys and plans to activate changes based on the results. Track your progress over time. And be humble enough to view leadership as an opportunity to change.

Across these recommendations from Grenon and Kline, we see the importance of values coming into play in the talent space. Just like consumers, today’s employees need to feel engaged for a higher purpose. This requires supportive leadership with the capacity to morph values-oriented brand building into a workplace culture that puts a spotlight on the full employee experience and addresses the factors of workplace engagement that can be identified, measured and optimized.  

About the Author

Patrick McHugh, MBA, PhD

Dr. Patrick McHugh is the Co-Academic Director of the IE Brown Executive MBA program and Professor of Practice in the School of Engineering at Brown University.  He teaches courses on entrepreneurship and strategy at the undergraduate, graduate, and executive levels. His research interests focus on legitimacy and network theory in the context of social media, decision making, issue/innovation management, and governance. McHugh’s work has been published in the Journal of General Management, Journal of Management and Organizations, Journal of Prediction Markets, and MIS Quarterly Executive.  

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