Why Most Employee Engagement Surveys Fail (and what you can do about it).
You start with good intentions. An attempt to uncover the true feelings of your employees and to improve their experience of work is commendable. We all want a better workplace. We all hope to be inspirational leaders.
Yet the reality of employee surveys often falls short of this ideal. A study by AON revealed that almost 80% of managers either did not view, or did not act on the data received from their employee survey. Similarly, 80% of employees who had done an engagement survey told us it made no difference to their working lives. In spite of the perception of the individual employee, we know that leaders do not set out to invest thousands into lengthy surveys and detailed analyses only to do nothing with the data. So what is going wrong?
It’s useful to consider an example from one of my earlier client encounters at Happiness Works. We sat down with a highly energetic and motivated HR team in a chain of UK coffee shops. They were experiencing huge employee churn. Partly responsible was the casual nature of the work but these figures were alarming. Thousands of pounds worth of hiring and training investment was walking out the door every single week.
Happiness scores confirmed that those workers at the lowest level of the organization, and those with the most customer interaction, were not happy. When we consider the impact of unhappy baristas on customer experience, the true cost to the business starts to emerge. In the service industry, the link between employee happiness, customer happiness and subsequent performance is particularly tangible. One study found that organizations with a customer satisfaction score at least one point higher than sector average achieved average sales growth of 7.6% (compared to a drop of 0.4% for those scoring lower than average).
These HR leaders were evidently well intentioned and truly wanted to see employee happiness increase for the sake of their people, not just to address the huge financial burden that unhappiness created.
So we asked how the managers of each coffee shop were assessed. What do they perceive their key performance measures to be and how do they, and their superiors, assess how well they are doing?
Had we overstepped by requesting such intimate details of the organizational structure and strategy? Perhaps. But it is clear that as long as employee happiness is not considered a measure of success at the very top of the organization, it will not be experienced at the very bottom. That means incentives and goals have got to align around this metric at all levels in the same way they do for sales numbers.
“As long as employee happiness is not considered a measure of success at the very top of the organisation, it will not be experienced at the very bottom.”
Of course these store managers were incentivized to meet revenue goals. No successful leader could imagine operating without a keen eye on quarterly, monthly, even daily numbers. The problem comes when this is the only metric we track. We may think we‘re reporting more broadly: sales, customer acquisition, average order size, order frequency and customer churn. All of these are meticulously tracked because they are levers we can pull to achieve the ultimate aim of higher revenues. In short, they are proxies for revenue and all point in the same direction. These are backward looking metrics: they show what we have done up to this point, not what we will do tomorrow and certainly not what we have the potential to do. It is also worth noting that it is only by measuring and understanding these numbers, and their drivers, that they have become standard and effective levers for performance.
The magnitude of this single financial number becomes apparent when we consider that achievement towards these goals can determine such major choices as dismissals and redundancies, product or department termination, major new investments and even decisions to pivot, merge, acquire or sell.
That’s a lot of confidence to place on one backward looking metric.
So how could this coffee empire increase employee happiness, reduce those costly churn rates and support barristas to deliver the exceptional service that keeps customers coming back?
They must treat employee happiness data as equally important to revenue data. It has to be one of the central measures of success in the business, reviewed and managed in the same way revenue and all its proxy measures are. That means starting at the very top of the organization and allowing that to filter down into how talent is rewarded and recognized.
Today, the companies doing this remain the exception rather than the rule. A number of factors contribute to this status quo and we are deeply passionate about recognizing them in order to unlock dormant organizational potential.
1. The individuals leading employee experience programs are often not the same ones setting the corporate agenda. It doesn’t matter how committed, intelligent and well-intentioned a Head of HR is about employee happiness, if the CEO does not genuinely believe this number is as important as last month’s revenue, the organizational infrastructure will continually undermine their efforts.
2. CEOs tend to come from a Finance background. They are more comfortable measuring pounds and pence than feelings and experience. A business education teaches us that success equals economic growth. We’ve slowly accepted that GDP as a measure of a country’s success is incomplete, at best. It does little to reflect the extent to which a country and its people are flourishing. Its time to do the same at work.
3. It is widely believed that happiness cannot be measured. For many leaders, investing (time and resource) into employee happiness rarely goes beyond subsidized beers, food and pool tables. Happiness and wellbeing projects are perpetually placed on the back burner in favor of more pressing ‘business critical’ projects. Although this is a common outcome when happiness data is not given the importance it merits, it is also a symptom of an underlying belief that felt experience cannot be legitimately measured. That belief lets us off the hook for failing to manage it, but simply is not true.
Happiness Works provides a robust scientific measurement tool that formulates and manages that KPI in real-time, as well as the fundamental drivers behind it. It allows us to unpack what makes our employees happy at work and to make data-led decisions that drive performance. Does weekly beer truly drive loyalty and engagement? Or should we invest those dollars into establishing a mentorship program? Unlock the intelligence of your greatest asset and put employee happiness data at the heart of your decision-making. Doing so will replace unutilized and overpriced engagement survey data with actionable intelligence that empowers leaders and employees alike.