A couple months ago I was sitting at a dinner with a few friends who are in senior leadership positions at companies. We were talking about how to gauge employee sentiment, and one friend said, “I learn everything I need to know about my employees through our monthly engagement survey.” Another friend interjected, “That’s a bad approach because engagement survey results only tell you if you have an engagement problem. They don’t tell you how to fix it.” Finally a third friend jumped in and said, “Aren’t we really just talking about company culture?”
This exchange struck me as notable for three reasons:
1) Frequency. I’ve heard some version of this conversation take place with almost daily frequency in my conversations with leadership teams.
2) New data is an emerging trend in HR. It’s clear that leadership teams understand that there is a body of data available on employees that goes beyond traditional performance that can be used to positively impact business outcomes. This data captures things like employee engagement and culture.
3) The market hasn’t successfully educated HR leaders with a framework for understanding new data and tools that focus on engagement and culture. Many leaders don’t have a basic framework for understanding what types of data are available, and how they can be used.
In this article I want to focus on providing a framework for understanding two popular but commonly confused concepts: employee engagement and company culture. We’ll cover the basic definitions of each, the type of data that drives an understanding of each, and a framework for understanding the relationship between the two concepts.
What is employee engagement?
Definition: Employee engagement is the commitment the employee has to the organization and its goals.
The term “employee engagement” was first coined by William Kahn in 1990 when he explored the conditions under which employees engage physically, cognitively, and emotionally with their work. Since then additional concepts for engagement have emerged:
Needs Satisfaction: to what degree do employees get to express their preferred self in their work
Burnout Antithesis: engagement is defined as energy, involvement, and efficacy in work vs. burnout concepts of exhaustion, cynicism, and lack of accomplishment
Satisfaction-Engagement: engagement is equivalent to job satisfaction
Multidimensional: this approach distinguishes between job engagement and organizational engagement
With so many different definitions out there, which one is right? There isn’t a correct answer to this question. If you naturally gravitate towards one of these definitions, then in our experience that’s probably the one that’s most appropriate for your employees. That said, it is always helpful to understand the range of potential metrics that exist so that you can periodically affirm that you are utilizing the best one for your current strategic challenges.
The most important characteristic to remember when thinking about employee engagement is that it is a point-in-time assessment of how employees are feeling about their company and their work. Employee engagement can fluctuate quite frequently depending on a number of different factors. Your engagement score might change from month to month or even week to week. Every company is different, and we see companies increasingly moving away from annual surveys because of this reason. Typically companies move towards a quarterly or monthly survey when modernizing their engagement metrics.
How do I measure employee engagement?
Regardless of which approach to engagement you are endorsing, almost all engagement data is captured via online surveys. It might seem self-evident, but this is the fastest way to scale your approach to understanding employee engagement.
As far as providers go, we here at Pomello have seen a range of different approaches. Some companies take a DIY approach and utilize a generic survey tool like SurveyMonkey to administer their engagement surveys. Other companies like Culture Amp, TinyPulse, and Gallup offer out of the box surveys with varying levels of customization available.
The advantage of going with a provider is that you have the opportunity to benefit from their expertise in survey design, which you may not have in-house. In addition, an engagement specific provider will typically provide analytics to accompany the data you collect. These analytics should allow you to tell a story utilizing data—a critical role for any HR leader. For example, if you are monitoring engagement and retention on a sales team you might track whether engagement moves with sales performance. If you have several down months in terms of performance and you see this reflected in your engagement scores, you want to be sure that you retain your top performers by taking action to boost these key individuals level of engagement.
When selecting a survey engagement provider, here are a few questions that you can ask to understand their approach and their offering:
What model(s) of employee engagement form the basis of your survey?
Do you allow customization of your survey in terms of content and frequency?
Do you provide analytics in real-time? Are these analytics dynamic, e.g. can I segment my engagement data by different employee cohorts?
What is company culture?
Definition: A system of shared values defining what is important, and norms, defining appropriate attitudes and behaviors for employees within an organization.
Company culture emerged as a concept in the 1980s and 1990s and the first academic studies emerged around this time as well. Similar to engagement, there are a number of different functional definitions of organizational culture, but most center around the concepts of values and assumptions which contribute to the development of norms, behaviors, and other cultural activities. If values tend to be more conceptual in nature, then norms and behaviors are the more concrete building blocks that make these values have meaning. Think about innovation as a potential core value. What does that mean in terms of behavior? At Pomello we’d argue that innovative cultures are characterized by employees who are willing to experiment, who are comfortable with risk, and who are quick to take initiative—these are the behaviors that underpin this value.
An additional critical element in understanding organizational culture is the way that an individual may relate to workplace culture. Just as employee engagement allows for an employee to interact on an individual level with their workplace and their job, our understanding of culture allows for individuals to view different cultures as being more or less attractive.
Think about the much-vilified culture at Amazon. Is it possible that rather than being a culture that is fundamentally “bad,” that it is just a culture that doesn’t work for some people? Perhaps it is the type of culture that works for hard-driving, aggressive, and results-focused individuals— these are the people who will thrive at a company like Amazon. Company culture can therefore be thought of in the HR framework of attraction, selection, and retention by effectively narrowing the ideal employees for a workplace based on alignment around cultural values and norms.
When taken as a whole, company culture is a set of shared beliefs around what is expected, valued, and rewarded in the workplace. This shared understanding plays a large role in determining who gets hired, who is promoted, and who departs from a specific organization.
How do I measure company culture?
The traditional approach to company culture was through 1:1 interactions, consistent communication, and alignment of incentive systems. These components are all still critically important to managing company culture effectively. More recently, new technology has emerged that attempts to quantify or measure company culture by applying survey and analytics technology in a similar fashion to employee engagement (disclosure: I am the co-founder of one of these companies, and Pomello does just that!).
The challenge in building solutions like these is that employees are prone to gaming surveys. This gaming can be the result of concerns about retribution by management, but it can also be the result of unconscious influences like social desirability bias—when an individual answers a question based on what they believe is the socially acceptable answer rather than answering in a way that reflects their true preferences. Effective methods for mitigating these influences involve careful survey construction, utilizing indirect questioning methods, and a focus on management communication and transparency.
Here are a few questions to ask a culture survey and analytics provider to understand their offering:
What is your definition of culture?
How do your surveys avoid cognitive biases, e.g. social desirability bias, in survey-takers?
Can a culture have too many values?
Does your model of culture have predictive power?
What is the relationship between employee engagement and company culture?
Because employee engagement and company culture both involve an individual’s relationship with their workplace, it is very easy to see why they are so often confused. That said, there is a clear distinction.
Employee engagement is how employees FEEL whereas culture is what employees BELIEVE and how they ACT.
You might be wondering now if one is more important than the other, or why you need to care about both. Both are important for understanding what is happening within your organization. The formal relationship is that culture strength will predict employee engagement. The stronger a culture, the higher the employee engagement.
This should make intuitive sense. If employees are highly aligned around the beliefs, values, behaviors, and incentives that drive how they act in the workplace, then strong alignment will lead to less social friction and higher productivity. This feeds into a higher level of employee engagement on average.
There are some important differences in how engagement and culture trends emerge over time. Culture predicts engagement, but beliefs and behaviors are slow to change. Engagement is a critical output of a strong culture, but over short time periods will be more volatile than culture.
For example, a down month of sales can negatively impact engagement while the culture remains strong. The engagement insight is important to keep tabs on in this scenario, but is not by itself cause for alarm. That’s because a blow to engagement on a team with a strong culture will rebound over time. However a low engagement score accompanied by a trend towards lower culture strength indicates that there is a breakdown in beliefs and behaviors happening on that team. In this scenario a manager would need to evaluate why that breakdown is occurring. Has the team grown significantly and are the new hires onboarding into the culture effectively? Has there been a restructuring or reorg that is disrupting the team culture? Has there been a leadership change or other change in communication that is creating friction for employees?
The bottom line
It’s a brave new world of HR technology when it comes to employee engagement and company culture. There are a lot of new providers to evaluate, and the sheer quantity of learning required can be daunting. That said, if you are committed to managing these aspects of your employee experience then you are a step ahead of many companies. The important thing is to hold yourself accountable to consistently caring about the employee experience. The role of technology should be to help you communicate the impact of management decisions and critically tie it back to business outcomes.
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