The Two Stealth Archenemies of Employee Engagement
April 30, 2012 § 1 Comment
I needed to use my leaf blower. I plugged it into an extension cord with multiple plugs. It didn’t work. I shook it, twisted the plugs and wires to no avail. I decided I needed to take it apart and find the root cause of the problem. I found my electric drill. I wanted to use it to remove all the fasteners more quickly. I plugged the drill into the same extension cord. It also didn’t work. I realized one of the extension cord plugs was defective and prevented the use of both the blower and the drill. Once I switched plugs everything worked fine. A hidden flaw in the extension cord stopped me. Sometimes we need to find the tool that doesn’t work and stop using it.
Many leaders work incredibly hard to improve employee engagement and yet they rarely achieve a significant improvement. The percentage of engaged employees continues to hover around 30% and has for years. Why? There are two major barriers that continue to prevent improvement. They must be removed. Contingent pay for performance and the typical performance review policies are defective. These two stealth archenemies create hidden barriers to improving engagement. Sometimes we need to find the tool that doesn’t work and stop using it.
Employee engagement is the emotional connection employees have that causes them to want to exert extra discretionary effort. Because the effort is discretionary it doesn’t require extra pay. It naturally emerges from the quality of the work environment and the quality of the leadership.
To have sustainable employee engagement effective leaders must create an environment with five key characteristics. There must be a clear and compelling purpose; a sufficient amount of the work must be challenging (the challenge must be balanced with the skills of the employee); it must provide frequent and meaningful feedback; it must allow for sufficient freedom for effective decision making; and it must provide a sense of progress. If any one of these five elements is missing, employee engagement suffers. Both pay for performance and the typical performance review undermine some of these elements in stealth ways.
Pay for performance
The most damaging pay for performance is the contingent type where the message is “do this and you will get that.” This type of pay for performance damages engagement because it converts intrinsic motivation into extrinsic control. It undermines the sense of purpose. It ignores why the goals are important to the organization and instead creates a focus on what extrinsic reward the accomplishment will give the employee (money or bonus or prizes etc.).
Risk taking and challenge are also damaged. Rewards connected to tasks will cause most employees to take the easy way toward the accomplishment.
Freedom of choice is damaged by contingent pay for performance because the policy limits the employees’ focus. The policy acts as a hidden barrier to unforeseen changes in the work environment that may require immediate attention and a shift in priority. These changes may require a shift in priority away from the specific employee accomplishment. An employee that rewarded to focus on the old priority will resist the shift. This resistance can often go unnoticed.
The Typical Performance Review
This policy damages at least two of the key elements of engagement. First, because it is a grade (or rating) on the employee performance it reduces the desire for risk taking and accepting challenging assignments. Any assignment too challenging will cause the typical employee fear of failure. This fear often goes unnoticed and therefore the damage is stealth.
Secondly, annual feedback is not enough to meet the “frequent and meaningful” criteria for feedback that creates engagement. A different process is needed. I often hear consultants and managers advise those who deliver performance reviews that the typical review must not be a surprise. In order to avoid surprises there must be a different more frequent process that provides that frequent meaningful feedback all year long. Why not just replace the typical review with that process?
Contingent pay for performance and the typical review both undermine a number of critical elements of employee engagement in hidden ways. Keeping those policies while trying to improve engagement will only cause frustration for both managers and employees. Sometimes we need to find the tool that doesn’t work and stop using it.