The intersection between HR strategy and HR technology

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Engagement is Economic Theory

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I was having a recent conversation with John Sumser where we discussed my need to be an engaged employee. Indeed, I’m that guy who is almost always engaged because I honestly love my work. I’m one of those unique people who actually find the world of HR and HR technology interesting. In general, I’m the typical, highly engaged employee. I generally overachieve, I almost always exceed my goals, my clients love me because I execute great work, on time, and usually under budget. However, we all know that our companies and our direct managers are also major influencers of our engagement, and I believe that one can be completely engaged with the work, but not the company. I can overachieve on client projects, but completely underachieve on internal projects when things in management go wrong.

One of the things I love about Sumser is that he is always the skeptic. HR has been talking about employee engagement for years, and we truly believe that we can make both our organizations better and our employee’s lives better by getting high engagement from them. But here’s another take on it. Rather than making our employee’s lives better, what we are really trying to achieve is to suck the additional effort and work time from them, with nothing in return. We’re not going to pay them more. They will do more work than the person next to them, but not get more benefits or retirement money. We all know that the linkage between performance and incentive compensation is pretty much broken in almost all organizations. Most of us also know that the complete “schmuck” sitting at the manager’s desk in front of us had the same opportunity to advance as the great manager next door to him/her, so development and career progression does not always identify the right person either. The bottom line is that I can be a middling employee and reap all the same benefits as the great employee.

I have a nephew working in IT at a retail company who takes great pleasure in the free lunches that are provided. Many organizations have offered this type of service in the past, and while it’s nice to save everyone $10 that they don’t spend on a sandwich at the deli, every organization also realizes that at $40k per year, the organization is saving $20 by keeping the employee working at their desk over the lunch hour.

Perhaps being a great employee provides me a marginal enhancement to gaining better rewards, but that probability does not make up for the additional effort I’m going to provide as an engaged employee. For those of us who work 70 or 80 hour work weeks, most of us are not going to double our salaries. But we do this because we either believe there is something in it for us, or because we love something about what we do. I think it’s perfectly valid for us to “sell” employee engagement as something that benefits the organization and the employee. But perhaps we should be honest at least with ourselves: at the end of the day we really just want our employees to work that extra hour without having to pay them for it.

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4 responses to “Engagement is Economic Theory”

  1. Greg Harris Avatar

    Any executive that thinks an employee engagement strategy is an attempt to get people to work extra hours for free would be great fodder for a Dilbert cartoon. It’s an absurb conclusion.

    Does an NFL coach want players to show up for practice merely to increase employee work schedules? That’s ludicrous!

    People–leaders and followers alike–want to work in engaged environments because we have an innate longing to win. And winning is easier and more fun when everyone on the team is equally committed to win.

    Any engagement assessment worth its salt will ask questions about how well the company recognizes exemplary work. Employees trusting that their extra effort will be recognized is a big part of the engagement equation. “Recognition” isn’t just an hour’s wage. It might be praise, a promotion, more autonomy, access to new learning opportunities, etc.

  2. Andrew Marritt Avatar

    How engagement is used within HR concerns me on several points, not least that the focus on engagement is probably resulting in the profession being relatively blind to other, arguably as or more important factors.

    My first concern is that there is no common, shared agreement on what exactly is engagement. Even Gallup, who pioneered the concept, seem to have various used various meanings. Without agreement on what it is it becomes hard to measure and compare.

    For example the above suggests you are engaged with your work, yet this may not imply you have similar perceptions towards your employer. Vice-versa may imply.

    Second, much of the HR writing implicitly talks about engagement as an outcome, and that it is causal to higher productivity, lower retention etc. I have yet to see any information that suggests there is a causal relationship.

    As an example, supporters of engagement suggest that engaged employees are less likely to leave. However in most firms we see both engagement and probability of leaving decreasing with length of employment (actually both have bathtub curves in the long-term).

    To summarize, I think we:

    * need to develop a less woolly construct of engagement, that can be measured more accurately
    * ‘sell’ the business outcomes, not engagement as we can’t show a causal link
    * not let the dazzling light of engagement blind us to the existence of other important drivers of the key business outcomes.

  3. […] In addition there was a conversation I had with my friend Jayanth, and then there was Dub's post on employee engagement and maybe it's just economics – and some other conversations with traditional HR folks and what […]

  4. Karen Avatar

    Having just finished working with HR to roll out a staff benefits program: with the aim of increasing engagement, our main goal is to create a positive office culture. Ofcourse there are other business drivers behind a happy work place such as increase productivity and more attractive corporate brand. Time will tell how effective the initiative is.