Employee Engagement? It’s Just a Meaningless, “Feel Good” Business Metric

My company helps customers decrease turnover or increase employee performance using predictive analytics.

During these assignments we identify existing employee data that can be used to help us understand patterns and predict top/bottom performers or job candidates with a low flight risk, pre-hire.

At times, we are asked if employee engagement data would be meaningful in our analysis.

Giving a false sense of control

Businesses and their HR teams have measured employee engagement as a way of trying to improve business performance.  Millions have been spent conducting engagement surveys, and their follow on programs, targeting areas that measure low in employee engagement.

Yes, it can be satisfying to see reports that highlight areas in the organization with and without engagement.

But, engagement reports often provide a false sense of control that engagement, training and other employee development programs will lead to an increase in actual, real business performance.

It seems that executives and their HR teams, at the highest levels, have bought into the myth that high engagement leads to high performance. I say it’s a myth because I can name on one hand the number of companies that have done their own research proving this connection.

6 reasons to stop using engagement as a business measure

With that in mind, here are six (6) reasons businesses need to stop using employee engagement as a measure of business success.

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  1. Employee engagement isn’t the goal. Business performance is the goal. Most businesses don’t, and can’t, tie employee engagement results to an increase in business performance. Engagement programs can sometimes show an increase in engagement, after a program, but not an increase in actual performance. Employee engagement is a middle measure. No company exists to have engaged employees. Businesses exist to perform.
  2. Justifying any kind of program based on someone else’s research is a less than rigorous business practiceMost engagement programs mention someone else’s research (either from a vendor selling employee engagement solutions, an article from an industry though leader purporting to show a connection to real performance,) showing a tie between engagement and shareholder value. You need to read beyond the headlines. Most of the “performance” has been gathered from interviews with senior leadership about their impressions vs. looking at actual performance. For actual businesses that published some research early on, those copying need to realize that these other companies had a particular engagement issue, in a particular industry, with their own particular culture, selling their own particular solutions at a particular time in their evolution. Jumping to the global conclusion that engagement activities will have the same impact for your firms is a massive, risky and very expensive leap.
  3. Rigorous analytics often show little or no correlation between high engagement and an increase in business performance or a decrease in turnover. Take the real example of a large software firm who implemented an employee engagement program for their entire organization. Engagement scores among their sales team were over 90 percent. They grew their brand to be one of the best brands to work for. They were the No. 1 software firm to work for within a large region of the U.S. (five years in a row). Yet, they also had close to 80 percent annual turnover and sales were plummeting. Engagement programs definitely increased engagement. People loved to work there, but they weren’t performing. Engagement is a middle measure. Engagement is different than real business performance.
  4. Engagement is a middle measureAt best, employee engagement scores are potentially interesting as a metric that indicates something the business cares about. But this connection needs to be proven. The business can’t pay it’s employees or shareholders based on engagement scores. They need to tie the engagement scores to someone that helps them pay their bills or reconsider the reason for all of the ongoing engagement research.
  5. Engagement scores are not actionable. When a score isn’t tracked to an individual, the most benefit the score can provide is to show a trend, i.e., 65 percent of people in this region are/are not engaged.
  6. It’s a vanity metric for the company. I love the idea that people are behind their vision and like working there. It makes a manager and HR feel good. Who wouldn’t want to be the best place to work with everyone marching behind their vision? I’m not negative on employee engagement scores for any reason except that businesses and their HR teams have been led to believe engagement surveys equal business success. And they don’t. I actually applaud organizations in years past for trying to find and measure metrics that could lead to a prediction of future business performance.

It’s just a “feel good” business metric

Employee engagement was a good try, but ultimately, doesn’t reliably show a strong connection. Current predictive analytics methods and approaches and better systems and data make it possible to move beyond this “middle measure substitute” to predicting real business performance.

Employee engagement surveys can be useful when used the correct context – and “right sized” in terms of their importance to the organization. If they are used to take a gain a general measure of sentiment then they have value.

My concern is that engagement surveys have grown to be (in many cases) a substitute for predicting how well the employees will perform in their roles.

When used as a predictor of performance, engagement surveys are an expensive vanity metric that makes people feel good — but typically doesn’t lead to real business results.

Greta Roberts is the CEO and Co-founder of Talent Analytics, Corp. An acknowledged influencer in the field of predictive workforce analytics, her continued vision is to bridge the gap between the business, predictive analytics and workforce communities. Since co-founding Talent Analytics in 2001, Greta has established Talent Analytics, Corp. as the globally recognized leader in predicting an individual’s performance, pre-hire. In addition to being a contributing author to numerous predictive analytics books, she is regularly invited to comment in the media and speak at high end predictive analytics and business events around the world. Through recognition of her commitment and leadership, Greta was elected and continues to be Chair of Predictive Analytics World for Workforce, an innovative, annual predictive analytics event dedicated to solving workforce challenges. Since 2012 she has served as a faculty member with the International Institute for Analytics (IIA). Follow Greta on Twitter @gretaroberts.

 

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9 Comments on “Employee Engagement? It’s Just a Meaningless, “Feel Good” Business Metric

  1. Right on Greta! Far too much effort has been dumped into this topic. I have seen organizations whip themselves into an annual froth to drive their cumulative score up by .1% so that management has something to thump their collective chests about.

  2. HR, Leadership, engagement, talent management….all cash cows for the consulting and vendor industry (of which I am one). Greta’s point about research being only generalizable beyond the initial project when all variables are the same, is absolutely right. We pour money into quick answers, when the real answer has been there all along – get people committed to and interested in performance, not in feeling good.

  3. Wow, suddenly the concepts around employee engagement have taken on a new vogue. Interesting! The information represents that Engagement is not the solution that will guarantee you a successful business. Employee Engagement in this post defines you to understand the real power of straightening employee drives and needs with those of your company. and this is so true! Thanks for the great stuff @GretaRoberts

  4. We agree with Greta that engagement, measured poorly and in a way that limits effective analysis is useless. However the route we took was to take a data scientists prospective to fixing the measurement, rather than rejecting the measure. Engagement certainly doesn’t equal performance but it can be an important lead indicator if done correctly. The big recommendation which I’m sure we’d both agree on is to do the proper analysis with your own data & see if you can replicate / disprove the generalised findings.

    I wrote a longer post in response to this post here: https://www.linkedin.com/pulse/what-employee-engagement-good-andrew-marritt

  5. Greta–great stuff as always. We’ve been screaming about this since 2009!! Real analysis (not correlations, but actual time-series structural equation modeling) with our numerous clients shows no relationship between engagement and business outcomes. It’s a nice metric to track but that’s it. Further, Gallup’s been tracking it for 15 years and it has not moved at all–so all this money is spent on driving engagement and it must not be working. We show leaders what actionable elements on their employee surveys drive actual business outcomes. The so-called ‘thought’ leaders out there still haven’t defined engagement, still don’t know what the right number is and certainly have shown zero ROI. This is how fads start and end and how HR’s credibility gets harmed in the process.

  6. I agree that the current approach to employee engagement (which addresses symptoms and not the root cause) is not working. There is research that shows engagement and outcome are related:

    Harter, J. K., Schmidt, F. L., & Hayes, T. L.
    (2002). Business-Unit-Level Relationship Between Employee Satisfaction,
    Employee Engagement, and Business Outcomes: A Meta-Analysis. Journal of
    Applied Psychology, 87, 268-279.

    Saks, A. M. (2006). Antecedens and consequences of
    employee engagement. Journal of Managerial Psychology, 21(7), 600-619.

  7. Employee engagement is a collective delusion. A myth, that all staff are encouraged to pay lip service to, but no-one or at least very few people actually believe in private.

    Stacked rankings that include workplace behaviours, only foster the growth of this ongoing culture of collective lying.

    “Oh of course I’m engaged and I take pride in the company and I work outside my comfort zone to liaise with my stakeholders.”

    My rule of thumb is that anyone who says that sort of thing publicly *and* privately is deranged or delusional or both. Its in the same category of lunacy as anyone who regularly says they are “passionate about change”. Either their lying to me or two themselves or both. Either way their to be avoided. To me it is deeply concerning, that that this sort of facade, has now made its way into political speak on either siade of the spectrum.

    Senior leaders seem unaware of this and have bought into the culture of relentless, enforced, staff engagement. When a new CEO took over my company and immediately announced his “vision” (a recognised senior mangement approach, sadly). All of my co-workers thought it was as hilarious as it was irrelevent. But of course no-one expressed this view to management, as this would be “negative thinking”.

  8. It all comes down to the “Y” Variable – how “engagement” is defined.

    If the dependent variable is revenue, costs, widgets manufactured, etc., one can design a powerful equation that identifies the business drivers.

    Not a useful discussion unless we know how the equation is designed.

    Tom Palladino
    Refined Analytics

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