Engagement or productivity at work
which is more important?

There are a whole series of benefits that organizations stand to gain (potentially) from employee engagement: greater revenues, client satisfaction, innovative ideas, etc.

It is no surprise, then, that businesses devote time, effort and money in pursuit of employee engagement. The range of incentives available to them is wide, from purely psychological stimuli, through intangible factors, tangible perks, to heavy artillery in the form of purely monetary rewards and incentives. Every HR specialist knows these tools inside out. Especially today – in an employee’s market – organizations do their utmost to improve comfort at work or, more and more, to boost workplace well-being.

50 shades of motivation

A quick online search (which took less than an hour) returned as many as 50 phrases that describe the concept of motivation in the many varieties and meanings of the term. A substantial majority have sprung up in the fields of economics and psychology, and with reference to employees. This shows how necessary (but also how trendy) the topic of motivation is today. By definition, motivating employees is not something that businesses do out of altruism or charity. Ideally, it should be a win-win situation. Expecting greater involvement from its employees, the enterprise offers them certain gratifications (as an incentive to do something or as a reward once expectations are fulfilled). In return, the employee steps up their engagement at work, which (at least in theory) translates into economic benefits for the enterprise. But does it work?

Ryan Fuller and Nina Shikaloff in their study reached conclusions which may serve as a cold shower for many heads of HR and general directors. Working with two Fortune 100 companies, they decided to test the assumption that the most engaged employees are more productive. Out of their many interesting observations, I noted particularly the three below:

1. The engagement level does not go hand in hand with productivity (the study employed working hours as the primary measure of productivity) — in 47% of cases no correlation was found between engagement and productivity.
2. Measuring engagement by the statement 'Company X is a great place to work' may only reflect how well the employee is matched to the corporate culture of that company.
3. Businesses should strive to create a corporate culture which will champion both engagement and productivity.

Looking at the findings of Fuller and Shikaloff, a question comes to mind. Which is more important – engagement or productivity at work? And here we arrive at a dilemma resembling that of which is a bigger holiday – Christmas or Easter. Are we interested in engagement which is not reflected by work performance? And, vice versa, what results can be expected from disengaged employees?

I tend to lean towards the third of the conclusions mentioned above. Let’s work towards enhancing engagement (engagement = potential), but without losing sight of productivity (productivity = use of the potential).

To someone responsible for business results, which of these two employees is more valuable:

— someone who feels comfortable at work, and who holds 3 business talks in one day, or

— someone who is not so well-adjusted, but has 8 such talks?

I’d still go with the latter. Without action, there are no results. A good atmosphere, in itself, does not guarantee business success.

Shotgun shooting

HR activities in the enterprise often resemble shotgun shooting. We use many instruments simultaneously, with only some hitting the target (although we can never be completely sure of that). And, oftentimes, we have no idea which ones. We barrage employees with stimuli, which can cost the business several percent of its annual budget, plus the cost of swelling HR departments to handle all these activities. And we believe it makes sense. We believe because usually there is no-one in the business who can prove how individual activities impact on (or correlate with) results.

The effectiveness of motivational activities tends to be inferred indirectly, e.g. from the achievement of KPI targets, revenue growth, reduced employee turnover, or by analyzing the sense of well-being among employees with the use of questionnaires. And we believe there is a strong correlation between motivational activities that we undertake and the indicators we use to confirm their effectiveness. The metrics mentioned above are not bad in and of themselves, and probably there will be some correlation between the effort and expense on motivating employees and their increased engagement, further affecting business performance (such as for instance revenues and expenses). But is it certain?

If we want to act rationally, we should be able to answer these three questions:

1. Do our activities have a real impact on improving employee engagement? And if so, how strong is that impact?
2. Do we know which activities work best at improving employee engagement?
3. And last but not least — Do we get back what we have spent on enhancing employee engagement?

Is what we do effective? Turning belief into knowledge

The starting point in the assessment of effectiveness of motivational activities (increasing employee engagement) is to establish the baseline. That is, to learn about the level of employee engagement before we start introducing motivational incentives. Precision (accuracy) of data is essential. This is because, realistically speaking, motivational measures at best can increase engagement enterprise-wide by more or less ten percent. And this is an excellent result (if achieved and maintained).

Now, going back to baseline data collection to determine the effect of our efforts. We can (and in practice this is what tends to be done) use KPIs, revenues, employee turnover, or other indirect metrics. Or, worse still, questionnaires. However, we can now also use intelligent applications which will provide us with exact data about activity parameters for every employee. The tools I am talking about hit the market several years ago and introduced the concept of People Analytics

Having established the baseline, we can start applying incentives. After a pre-defined period (or on an ongoing basis), we can measure (check) whether and how the stimuli we used have influenced employee engagement. Results are checked using the same tool – a People Analytics application. To be sure (and to eliminate the potential influence of other factors on the outcome), we can run A/B tests through the application. We choose a group of employees who are exposed to a certain incentive (Group A). At the same time, the other group of employees are not covered by any incentive measures (Group B). The application collects data on employee engagement separately for Group A and Group B. We then generate a ready report containing detailed statistical data for each group. If Group A exhibits higher engagement during the test period, it means that our stimulus has worked. If there is no clear difference – it means that this is not the right approach. We will have to look for another stimulus. Such a process will enable us, in a short time and with little expense, to choose the stimuli which work best in our business. And accurately measure the benefits we have gained.

People rarely bother to verify the effectiveness of a given stimulus. So, it came as quite a surprise when the effectiveness of the US Scared Straight program, which cost USD 200 bn, was analyzed. In short, the program involved prison inmates giving at-risk teenagers a glimpse of what life behind bars looks like. They did not spare them graphic descriptions of rape and murder that take place behind prison walls. The objective of the program was to warn and deter teenagers from the catastrophic consequences of criminal activity. Seven studies meeting scientific standards confirmed that teenagers who participated in the Scared Straight Program were 13% more likely to … commit crimes than their peers from the control group. Outcome: every year the Program 'generated' 6,500 extra criminals.

Conclusions

Motivating people effectively (!) is a real challenge, even for experienced HR specialists. Like in everyday life, we are all spurred into action by different things. And it does not take long for something that served as a catalyst to become just another obvious element of mundane everyday routine. The stimulus no longer stimulates (or less so). It is surprising how often incentives which should “work” (intuitively speaking) fall flat, or sometimes even achieve an effect opposite to that which is intended (and expected).

If stimuli as strong as those used in the Scared Straight Program fail to work, can the motivational programs in my organization live up to the hopes invested in them?

We should not just trust our intuitive assumptions. Instead, let’s look for evidence to confirm that our efforts are productive. At present, applications collecting passive data on employee behaviors (People Analytics) are the best (most effective and cheapest) way to objectively assess the effectiveness of HR measures.

References

1. Fuller, R., Shikaloff, N., "Being Engaged at Work Is Not the Same as Being Productive"
2. "People Analytics vs Workforce Analytics"
3. Wilson, T.D.(2011), "Redirect: The surprising new science of psychological change"

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