David MacLeod: Employee Engagement in 2010

Employee engagement has been a buzz-phrase among businesses for a few years now. For some managers, its value has hit home. The Chartered Management Institute's "Future Forecast" survey at the end of 2009 found that business leaders were already resolved to do more to help individuals and team development in 2010.

And the MacLeod report, "Engaging for Success: Enhancing Performance Through Employee Engagement", compiled by Nita Clarke and David MacLeod, raised the concept at governmental level, seeking to demonstrate how engagement can counter the negative effects of recession and help a company to recover faster.

"Everyone is concerned with performance and how to get through the recession -- there is a growing understanding that people are key," says MacLeod. There is a group out there that think this is about doing an employee survey and then delegating the findings to work-groups and then getting them to act on the findings. This doesn't lead to the transformational benefits you can get."

Here, he talks to BNET UK about how the national engagement initiative is taking shape and shares his tips on how to prioritise people at work.
What would you say to managers who see employee engagement as fluffy or simply a fad - how would you change the minds of the hardliners?
We are not all leading in an engaging way. There's no magic wand here, but for the leaders to increasingly look at the evidence. Go and see bits of your own business that do engagement well, or bits of someone else's business. Go and see what engaged employees are doing. Ask your own people what their ideas are.
What senior leaders will find is that those managers who rely too much on command and control will be more and more sidelined by other teams that are getting engagement right and winning victories for the business.

A lot of people have had to put up with pay freezes and cuts - is employee engagement really going to be a substitute for a generous salary?
There is plenty of evidence money is an attractor, but there's much less evidence it's a motivator. If managers rely too much on money to engage employees, there's a better chance they'll get it wrong and find the issue of salary disengages staff.

If certain pay deals are thought of by others as unfair, then giving people big bonuses will do more damage than good to employee engagement over all.

What action is the government going to take in the next year to keep your report recommendations alive?
We've offered four remedies in the report and we'll be taking them a stage further, so that by March we will have a set of practical ideas for companies to download and use.
These are:

• Setting goals. If employees have an understanding of where the organisation is going, they can really help the organisation achieve those goals and have an increased sense of contributing.
• Listening. Managers who know how to listen treat people as human beings, not just resources.
• Employee voice. They feel they are listened to and are assured their comments are filtered up to senior managers.
• Trust. If there is a gap between the organisation's behavioural norms and its stated values, then there is a breakdown in employee trust.

Case study: What KPMG has done, why it's worked.
One of the companies, MacCleod and Clarke interviewed for this report was management consultancy KPMG.

The company has an outstanding reputation for attracting and retaining staff. According to Sarah Bond, Head of Diversity & Employee Engagement, KPMG Europe, this is no accident - it's a core business strategy that comes from the top.

The management consultancy launched an employee engagement initiative five years ago, called Managing for Excellence, because it recognised it needed to improve the dialogue managers had with employees around their performance and goals. It thought it could do better at career development and clarifying the rewards structure.

The initiative focused on around 350 people, who were familiar with customer-facing roles. They were trained to apply the skills they had learned having sometime challenging conversations with the company's clients internally.

It's their role to have the sometimes difficult conversations about performance and reward with other employees.

Bond said these people are more than mentors, because they have an impact on decisions about employees careers. But they are responsible for making staff understand why they are getting a specific level of reward and why it's important to the company as a whole that they reach the goals they are set.

PMLs come from the highest levels of the company and their own performance goals are rated in terms of how well they do in that extra role. They typically spend two years in the role.

The company will begin overhauling the development programme for PMLs and from now on, employee conversations will also focus more around flexible working. The workforce has been offered the choice, of reducing working time from five days a week to four, or a 30 per cent cut in pay, for any time period between two weeks to three months.

Bond says the successful implementation of this flexible working strategy will show good employee engagement in action, because this move could only work with an engaged workforce.

It's also creating employee engagement, because it requires good top-down communication to work.
Bond said 95 per cent of the company's partners have already signed up to the scheme.