Performance & Productivity
15-Sep-2011"Engagement just one piece of the puzzle"
Improving engagement will help a business lower its turnover, but it won't necessarily boost customer satisfaction or financial performance, says Metrus Group CEO, William Schiemann.
"Engagement scores are not enough to be successful," he told the AHRI 2011 National Convention.
"Engagement won't explain why you're losing customers, or why financial performance is declining." Engagement levels can be high, while the company is struggling, he adds.
Two other factors are critical in managing workforces and optimising talent, Schiemann's research shows.
The first is alignment. "We can have people who are engaged, but if they're not aligned with what we want to do as an organisation - if they're not aligned with our goals, brand and customers - we don't succeed. We can't win in that circumstance."
An employee in a low-cost department store, for example, who is focused on providing the highest level of customer service, will not help the company's results.
"Alignment is the best predictor of financial performance and operating performance."
The second critical factor is capabilities, Schiemann says. This means having in place the right talent, information and resources.
"Very often HR is the quickest group to be blamed when something goes wrong in this space. People say, 'Well, they weren't trained right' or, 'We hired the wrong people', but very often it's the way talent comes together with information and resources that makes the right difference."
The capabilities dimension is the best predictor of customer outcomes, he says.
People Equity
Getting the mix of alignment, capabilities and engagement (ACE) right creates "people equity", Schiemann told the conference.
It is well established that when customer equity is high organisations get good financial returns, he says.
But when ACE is high, it results in good customer outcomes and shareholder equity, better performance, lower turnover and higher productivity. "Organisations with high people equity are two times more likely to be financially successful, three times more likely to be quality leaders in their industry, and have half the turnover of low ACE companies."
To ensure alignment, HR should ensure employees have:
- clear direction;
- clear unit/personal goals;
- aligned measures/KPIs;
- regular performance feedback and coaching;
- appropriate accountability and rewards; and
- structure, silos and intergroup processes.
In terms of capabilities, employers should ensure that they are growing the capabilities that customers care about, by fostering:
- person/role fit;
- customer service drive;
- teamwork;
- resources/tools;
- the "right" information and technology; and
- innovation.
Finally, engagement efforts should focus on creating employees who are satisfied, committed, and who become advocates for the company.
The key drivers are:
- job security;
- fairness issues;
- compensation (including wages, benefits and perks);
- treatment with respect and dignity; and
- stress (e.g. work and family conflict, workload targets).
Source: William Schiemann - AHRI 2011 National Convention
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