The real secret of employee engagement
“Zombies, I call them,” one company owner said to us not long ago.
He was lamenting the lack of engagement among his employees. “They come in, do their jobs, go home. They don’t seem to care about going the extra mile, or even doing things right the first time. I keep ‘em on because I can’t find anyone better these days.”
This particular entrepreneur was blunter than most, but we have heard plenty of similar sentiments uttered in more measured tones. “People don’t care anymore.” “They don’t want to work.” “No wonder Gallup tells us that 85% of employees aren’t engaged in their jobs—they must have done their surveys in our shops.”
Strangely, however, some companies seem to escape this jinx. In fact, they’re hardly aware of it.
These companies—call them the Southwest Airlines of the business world—can pick the people they want, because prospective employees are lined up at the door. They build engagement to the point where people are likely to say, “I love my job!”
3 truths about employee engagement
These companies understand three truths about engagement that somehow seem to have escaped everybody else.
1. The first truth is this: Disengagement is the default state.
Think about most people’s experience of employment. They get hired. They have specific tasks to do, day in and day out. There’s a supervisor who makes sure they do those tasks correctly.
Would you be engaged? Probably not.
Sure, most people want to do a good-enough job so that they don’t get fired, or maybe so they can get promoted and make more money. But engaged? Dedicated? Passionate about their work and their company? Not likely. That 85% is a very large number.
2. Second: You can’t change this default state with slogans and encouragements.
You can’t change it by showering people with nice things like free pizza, new office furniture, or better benefits. We’re not against free lunches and other niceties. There’s just no evidence that they’re enough to overcome disengagement.
The alternative? It’s a structure of engagement. To put it in the simplest possible terms, people get engaged when it’s part of their job to be engaged. When they learn how and why their work matters, and when they have a stake in success.
And that brings us to the third truth about engagement, which requires a word of explanation. The explanation will show you how you can structure engagement.
A business is an economic institution. There’s a reason it’s called a business, and not (say) a “school” or “hospital” or “government agency.” Its purpose is to provide goods and services that customers value, and in the process to make money.
3. So here’s the third truth: If you want employees to be engaged, you should want them to be economically engaged. That is, engaged in the purpose of the business.
Companies that engage their employees in this manner make the economics of the business come alive. They hone in on one or two key numbers that drive financial performance. They work with employees to figure out how to move those numbers in the right direction.
[Webinar On-Demand] Learn how companies bring the economics of their business alive for their people.
Case in point: Southwest Airlines
When we worked with Southwest, for example, it happened to be a time when jet fuel prices were high. So the company and the pilots’ union launched a joint project to help pilots understand how they could improve SWA’s profits. The pilots, not management, came up with two things to focus on: pilot productivity and fuel conservation.
On the fuel conservation front, they began tracking fuel usage at each station. They translated the raw figures into cost data, so that the impact was clear. Most important, they started coming up with ways to save fuel without compromising safety or the customer experience. For example, pilots knew how to adjust their airspeeds and routes within the required parameters to use less fuel. They made a point of shutting off engines at the gate whenever possible. They “tankered” fuel from parts of the country where it was cheapest to parts where it was more expensive.
In short, they got engaged in helping the company succeed. The ideas they implemented could only have come from them, because they knew more about their job than anyone else.
We have seen similar behaviors at hundreds of smaller companies. At Boardman Inc., in Oklahoma, the company gathered input from everyone and came up with a metric to define winning: job profits per month. Again, ideas poured in about how to improve performance. Shop-floor workers found ways to reduce rework from 5% to 1% over three months, a huge savings and an increase in capacity. Sales reps determined which jobs had the best margin, and focused their efforts there.
This transformation in behavior took only a few months, and kept improving thereafter. At one point, company president Roger Grommet told us, “I don’t have employees anymore. I have entrepreneurs. Everyone is trying to make more money.”
Sharing the economic rewards
What about the economic rewards? After all, if employees help boost a company’s profitability — or whatever the key number is — shouldn’t they share in the proceeds?
Southwest’s pilots didn’t need an extra incentive. Most were shareholders in the company. Also, like other Southwest employees, they received a generous profit-sharing check every year. Boardman developed an incentive plan, funded with 20% of the increased profits generated by the improvement in job margin. This bonus was paid out quarterly, based on cumulative job margin performance. It was quite lucrative for employees as well as for the company: workers received 10 weeks of incremental pay at the end of the year.
So here’s the real secret of engagement: Economically engaged employees understand the business. They’re engaged in making money, for the company and for themselves. If they have to go the extra mile for a customer or devote extra attention to some part of their work, they understand why. Which means they’re that much more likely to do it.
And there’s a funny thing. The owners and managers of companies like those we’ve described? They don’t complain about their employees. They’re proud to be working with people like that.