More than ever, it’s important for organisations to focus on employee engagement and performance and creating an environment which communicates this as a priority. Gordon Barker of great{with}talent explains how to do this.

Employee Engagement and Performance Management Strategy

Within the context of dramatic change in the global economic environment, organisations need more than ever to focus on creating an engaging performance environment for their employees. Gordon Barker explains how to create an employee engagement strategy, how to communicate it internally and how to measure the return on investment from employee engagement.

Creating an Engaging Performance Environment

Recent research has highlighted HR’s lack of strategic firepower. A 2008 McKinsey survey found that 60 per cent of senior managers see HR as ‘an administrative department, not a strategic business partner’. Yet, great{with}talent’s 2008 Employee Retention Survey revealed that 75 per cent of HR departments have no retention strategy in place for their organisation.

Without a compelling strategy or business case, it’s no wonder that the HR budget is often one of the first to be cut in difficult times.

The good news is that the basic value of employee engagement is well established and largely accepted. Senior managers recognise that employee-related expenditure is typically an organisation’s highest cost. With the war for talent and the fast-approaching global labour shortage, it is increasingly important not only to retain employees but to ensure that they are capable and motivated to deliver high performance.

How do I Create an Engaging Performance Environment?

The first step is to define a clear strategic vision of what you are looking to achieve, your Employee Value Proposition (EVP). Your EVP is ascertained by aligning your organisational objectives, with what you need from your employees in order to deliver these and with what you offer employees that is compelling for them.

Your EVP must be aligned to your organisational vision and business strategy. It needs to articulate what value employees will get from working for you and how you are different to competitor organisations. It should encapsulate what current and potential employees perceive as the value of being part of, and contributing to the success of, your organisation.

Given the EVP is about the organisation, it needs to be owned by your leaders with a high degree of input from all levels of employees. HR’s role is to facilitate the process and to communicate the results.

Delivering the Value

Having defined your EVP, you need to develop an engagement strategy that will deliver it. Research highlights that there are 12 core areas that drive employee engagement, all of which are central to any HR strategy – from compensation and benefits to organisational communication, from leadership behaviour to performance management.

Read The Twelve Factors of Employee Commitment.

Whilst your strategy will focus on the entire employee life cycle, the exact balance of where you place your priorities will depend on your EVP.

Developing an engagement strategy will enable you to confidently allocate budget to your key priorities. However, it is more than an exercise in developing SMART goals. It should be about creating a coherent story that articulates how engaging your employees is central to delivering your organisational objectives.

As such, an engagement strategy is essentially the same as a HR strategy, but with one subtle but key difference. A HR strategy tends to focus on creating a series of related initiatives aimed primarily at increasing organisational efficiency through people processes.

An engagement strategy should focus on creating the best performance environment possible for your people. This distinction, if delivered correctly, can transform HR from being an interested party into a central player in business planning.

Communicating the Strategy

In simple terms, organisational communication is about delivering a message and checking it has been received and understood. Engagement is about bringing the message to life and helping people make sense of it and what it means to them.

A common communications mistake is to simply announce the initiatives being run, rather than how they will add value to the organisation. For HR, the key to successful communication lies in changing the language it uses and investing time to ensure that people understand and engage with the message.

For example, instead of focusing on the cost of recruiting and ‘onboarding’ a new employee, focus on the question: At what point, do we make a return on investment (RoI) in a new employee? This immediately shifts the focus towards how HR can work with the business to either increase an employees’ speed to performance or adjust the levels of investment in them, so they can more quickly contribute to the organisation.

It is also important to set the engagement strategy in context. For example, whilst one impact of high attrition rates is an increase in recruitment and training costs, the longer-term, more serious impact is likely to be a decline in customer satisfaction and ultimately a reduction in customer spending.

Measuring the Return on Investment (RoI)

To demonstrate a return on investment, you need access to the right information at the right time. This information will come from different sources: from business metrics, feedback from employees and managers, feedback from customers and from every stage of the employee life cycle (including staff turnover rates, employee engagement survey data and absenteeism rates). It should be quantifiable in real costs to the business.

Ultimately, the return on investment is dependent on what your engagement strategy is looking to deliver. However, each aspect of the strategy should have metrics that are aligned to the overarching Employee Value Proposition.

As well as the organisational benefits, what makes this really compelling is that it can change the perceived strategic value that HR provides to the organisation.

Contact great{with}talent and find out more about their TalentEngage employee engagement surveys.

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(First published in Personnel Today. Main image from Halogen Software)