Building success on individual validation, not empathy

Apple’s Steve Jobs reportedly fired employees while riding with them in the elevator, according to biographer Brad Stone. Microsoft’s Bill Gates used to throw epic tantrums. And former Intel CEO Andy Grove ‘was so harsh and intimidating that a subordinate once fainted during a performance review’.

In The Everything Store, Stone also painted an unflattering picture of the management style of Amazon founder Jeff Bezos. ‘Some Amazon employees advance the theory that Bezos, like Jobs, Gates and Oracle co-founder Larry Ellison, lacks empathy,’ he wrote. ‘As a result, he treats workers as expendable resources without taking into account their contributions. That in turn allows him to coldly allocate capital and manpower and make hyper-rational business decisions.’

Bezos himself has admitted that it is not easy to be an employee there. ‘You can work long, hard or smart, but at Amazon.com you can’t choose two out of three,’ he wrote in a 1997 letter to shareholders. Yet Amazon, like its tech peers, is a hugely successful company. Its first quarter revenues for 2017 rose by 23% year-on-year to US$35.7bn; it is ranked number two on Fortune’s list of most admired companies (after Apple) and earlier in 2017, it was listed as number two on LinkedIn's US Top Companies list.

What explains this disconnect between niceness and financial performance? Stanford professor Jeffrey Pfeffer argues that, while economic necessity and lucrative stock options play a part in Amazon’s success in attracting and retaining people, ‘important psychological principles’ are also at play.

‘Not everyone is chosen to work at Amazon and not everyone can tolerate the environment,’ he wrote in an article for Fortune in 2015. ‘Therefore, if someone survives or even thrives, that individual must be “special”. Survival at Amazon validates those who believe they are part of an elite workforce. That enhancement of the self provides incentives to join and remain, regardless of other aspects of the work environment.’

Bezos, in short, has succeeded not by creating a supportive and mutually enriching environment full of development opportunities — as HR literature has recommended for decades — but by focusing relentlessly on individual achievement.

Relationship between engagement and performance

Does that mean our notion of what a great place to work looks like is outdated, or even that the idea of being ‘engaged’ is unrelated to true value creation? Laura Harrison, Director of Strategy and Transformation at the CIPD, admits that we have to be realistic about the different business models that exist, but she’s clear that organisations have a responsibility to the people who work for them — to ensure their experience at work is positive and meaningful. ‘If you’re not prepared to take that moral responsibility then shame on you. Where is your licence or your legitimacy as a business to operate in society?’ asks Harrison.

Engagement, she adds, can’t be used as a blunt instrument or standard measure across all industries and all sectors. It’s essential in very human capital and knowledge-intensive businesses, but those that are more tech-focused or rely on a very small managerial elite for short-term gains and innovation may be more about ‘machinations on the balance sheet’.

But these questions do give us cause to look again at whether employee engagement is the right idea for the modern era. As a concept, it has been around for decades — ever since academic William Kahn defined it in 1990 as ‘the harnessing of organisation members’ selves to their work roles’. At the time, it failed to gain much traction but academic and consultant interest grew, and in 2002 Gallup launched its engagement survey, the Gallup Q12.

It was given a further boost in 2009 with the publication of the UK government-commissioned Engaging for Success report, authored by David MacLeod and Nita Clarke. The MacLeod report, as it was widely known, cited ‘convincing’ evidence of a positive correlation between an engaged workforce and improved performance, and concluded that four common factors underpinned effective employee engagement: strategic narrative (provided by a visible, empowering leadership), engaging managers, employee voice and organisational integrity.

Ubiquity soon followed. Today, according to research by Bersin & Associates, organisations invest around US$720m annually with the specific intention of improving engagement. Yet many of the countries that have taken the problem the most seriously, such as the UK, also have the most stubborn issues with productivity (it trails the rest of the G7 by 16%). The problem, says Harrison, is that we’ve turned engagement into a transaction when really it should be an intention. Businesses want more engaged workforces because they believe it generates returns for shareholders — effectively creating a win for themselves at the expense of somebody else. ‘Engagement is sold as a means to performance and productivity — it’s not sold as a moral imperative or a means by which you create value for your workforce,’ she says. ‘It is only a reasonable expectation on behalf of business leaders that your workforce will be engaged with your vision and your strategy if you have been inclusive in how you developed that vision and strategy.’

According to Gallup’s 142-country study, State of the Global Workplace, only 13% of employees worldwide are engaged at work — with the highest levels of engagement in the US and Canada. Research by Jacob Morgan, author of The Employee Experience Advantage, suggests that this could be because most employee engagement initiatives amount to little more than ‘an adrenaline shot’. A perk is introduced — often on the back of an employee engagement survey — but over time the effect wears off, scores go down and another perk is introduced. It’s a cycle that employees soon become wise to.

‘When organisations make real gains, it’s because they’re thinking longer-term,’ Morgan wrote in an article for the Harvard Business Review. ‘They’re going beyond what engagement scores are telling them to do in the moment and redesigning employee experience, creating a place where people want, not just need, to work each day.’ And that, he said, pays off financially: ‘Compared with other companies, the experiential organisations had more than four times the average profit and more than two times the average revenue.’

However, Rob Briner, professor of organisational psychology at Queen Mary University of London and a prominent critic of prevailing HR practice, says the statistical link between employee engagement and performance is far from strong. ‘There are lots of counter examples where people hate their jobs and perform well, or people love their jobs and are super engaged but don’t do very much,’ he says. US research firm Leadership IQ, for instance, found that in 42% of organisations, low performers were more engaged than high and middle performers.

‘I’m not saying there is no evidence that engagement works but it depends what you mean by engagement. The Gallup Q12, for instance, correlates [by a factor of] 0.9 with a bog-standard, free-to-use measure of job satisfaction that has been around since the 1950s,’ says Briner. ‘A lot of the debates about engagement are the same as the ones for job satisfaction. There’s a ton of evidence about job satisfaction and what it tends to show is not that there’s no link [to performance] but that it’s small.’

Part of the problem, he says, is a plethora of definitions, many of them contradictory. He has a point. The MacLeod report came across more than 50 ways of defining engagement but concluded it was most helpful to ‘see employee engagement as a workplace approach designed to ensure that employees are committed to their organisation’s goals and values, are motivated to contribute to organisational success, and are able at the same time to enhance their own sense of wellbeing’.

By its nature, such a statement is hard to quantify. ‘Engagement allows a group of people to talk about engagement and feel as if they talking about the same thing,’ says Briner. ‘How can you talk seriously about trying to improve something when you cannot agree on what it means?’

Find the problem and address it

Worse still, he says, focusing on employee engagement and surveys in particular is a huge distraction for businesses — it makes them feel like they are doing something positive when in reality they might be failing to address the problems that create performance issues. ‘Simply measuring engagement and trying to increase it will not fix those problems because you don’t know what they are. Unless you have understood that first, there is zero point in looking at engagement,’ he says. ‘For many performance issues, it’s not the attitude of workers that you would want to intervene in, it’s things like goal-setting, job design, technology, training and staff selection.’

Glenn Tunstall, a former police chief superintendent, agrees that before you can create an engagement strategy it’s essential to find out what’s wrong. But he is clear that specifically addressing employee engagement is the key to improving performance — in a little over three years, he and the rest of the team at Kingston Police in south west London succeeded in turning round an underperforming and crime-ridden borough by building trust and focusing on MacLeod’s four enablers of engagement. ‘I’ll have a fight round the bike sheds with anyone who says engagement doesn’t work,’ says Tunstall, now a consultant for Merida Consulting. ‘There’s nothing else we did in that borough. They didn’t get more pay, they didn’t get any more time off, they got a really rubbish shift pattern and the working conditions set by the organisation (pay and pensions) were getting worse. The only thing that was different was we were engaging with them and they were getting lots of reward and recognition.’

Others, however, would argue that what Kingston Police and many others, such as those on the ‘best companies to work for’ lists, have achieved, while highly commendable, isn’t actually employee engagement — at least not in the way we tend to define it.

Focus on good management and HR practice

David Guest, professor of organisational psychology and human resource management at King’s College London, points out that while research on award-winning workplaces shows some evidence that they are better in terms of performance, effectively what they’ve done is created a climate that supports good human resource practice. ‘They call it engagement at the moment; they might call it something else in a couple of years, but it’s basically good management — they have got a lot of competent people around so good things result.’

Guest makes the distinction between organisational engagement (what we traditionally mean by employee engagement) and work engagement. The former, he says, is a ‘rehashing of two existing ideas, organisational commitment and organisational citizenship behaviour’ and, despite the claims, there is little evidence to support its impact on business performance.

‘A lot of the literature and consultancy on organisational engagement of the Gallup-type approach is very limited and hasn’t demonstrated that it has any impact on anything very much,’ he says. ‘In addition, if you look at the literature on organisational commitment that’s associated with lower intention to quit, it tends to be associated with more citizenship-type behaviour, but it’s not clearly associated with higher performance.’

It’s a different story for work engagement — give people more autonomy, responsibility and more challenge in their individual jobs and they tend to respond positively. ‘If you can use work design plus organisational support to generate engagement in the job or work that people do, that seems to first of all get better responses on the surveys, and second to be associated with higher wellbeing,’ says Guest. ‘Most research hasn’t looked explicitly at productivity but on balance I think you will get enhanced productivity, because with enhanced wellbeing you will have lower absence, fewer quits and generally more positive employees.’

The question for employers is how far they are prepared to go to generate engagement at the workplace level, given the trust required, not to mention counter trends such as the increasingly contingent workforce and the tendency to centralise control, which reduces rather than increases autonomy. Work engagement ‘has the potential but it is a potential that is not being realised,’ says Guest. ‘The puzzle for me is why, given the evidence, people in HR and elsewhere aren’t paying a huge amount of attention to work engagement and giving up on organisational engagement.’

Briner, who doesn’t hold much truck with any kind of engagement, says that in his experience the overall tone of much discussion in this area is uncritical. ‘For some reason, people are just a bit over-positive,’ he says. ‘Just imagine another profession getting behind this panacea-like cure for all its ills. People will say there are some problems [with engagement] but that we shouldn’t throw the baby out with the bathwater. I’m not so sure.’

In the end, however, does it matter whether employee engagement enhances performance — or whether it actually is a concept in its own right rather than a rebadging of existing ideas — if focusing on it encourages the right kind of business behaviour?

Guest is not arguing that engagement at the organisational level isn’t possible — just look at the British military, which routinely scores highly for its employee engagement — but that the productivity pay-offs tend to be limited and that, on the whole, we are ‘looking in the wrong place’ to achieve it. ‘Most HR people are dedicated followers of fashion,’ he says. ‘If it provokes the right kind of behaviour because it has become a fashion then it is no bad thing. The risk is it then becomes faddish, and that is what’s tended to happen.’

Organisations, Guest says, opt for, and then get hooked on, the easiest option, which often means bringing in the consultants to conduct a survey. His recommendation is to give up the multiple-choice options and concentrate on good management and good HR practice. That’s certainly not bad advice — but, of course, some people would probably call it employee engagement.

By Claire Warren, Editor, Work. magazine