Four levels of employee engagement

The evidence is clear: engaged employees are more productive than their disengaged peers. In 2005, an oft-quoted Towers Perrin survey found that companies with high employee engagement had up to 19% higher operating margin, net profit margin, revenue growth and up to 25% greater earnings per share than companies with low employee engagement. More recently, Watson Wyatt, found that "The highly engaged are more than twice as likely to be top performers – almost 60% of them exceed or far exceed expectations for performance."

Too bad we're not exactly sure how best to engage employees.

Everything we ever knew about employee motivation has now been thrown together and repackaged as employee engagement. Perhaps the secret was discovered over 40 years ago by Frederick Herzberg when he observed that the same employees who complained about poor working conditions, such as cold, dirt and dim lighting were quite happy to work on their cars in a dingy, dusty garage at home.

Clearly they didn't mind enduring hardships for something they owned. Maybe the reason why employees feel less engaged at work is because management takes the lion's share of ownership.

Why Management Monopolizes Ownership
Managers climb the corporate ladder by showing that they can make sound decisions. In meetings, they prove themselves by offering solutions to tough problems. They sell themselves and find major job satisfaction through their ability to analyze information and develop solutions. In fact, their whole identity and career success are based on being great solution generators. Because getting to the top is so competitive, winners develop intense territorial ownership for organizational direction.

Like star goal-scorers, the best solution generators get rewarded with the highest salaries. Executives monopolize ownership because they constantly need to demonstrate their knack for making sound decisions.

Employees collude in this process by expecting their managers to have answers to tough problems. Being goal scorers themselves, employees look up to, and strive to emulate, managers who consistently offer brilliant answers.

Many managers encourage employees to contribute ideas even if only for ways of executing management decisions. But not many managers draw more solutions out of employees than they develop themselves.

Managers like to develop their own solutions for two reasons: (1) their career success depends on showing how good they are at generating solutions and (2) getting involved in substantive issues is more fun than drawing ideas out of others. Operating as a coach or facilitator is just not as exciting as scoring goals.

A Culture of Engagement
If ownership is the essence of engagement, then creating an engaged culture means pushing ownership down throughout the organization. Empowerment is not enough because it merely gives employees ownership over their own jobs, not commitment to the overall enterprise.

It isn't necessary to give employees the power to make strategic decisions, however. It's enough for them to feel that their ideas are invited and taken seriously and that they can influence organizational direction, or at least some part of it. The crux of the matter is to make employees feel that their input is genuinely valued.

Ask yourself when have you felt most valued by your managers. Has it been when they gave you a pat on the back for a job well done or when they asked you for your input, advice or suggestions?

Remember the cliché, "actions speak louder than words." Praise amounts to fine words, but asking people for their advice is action. Surely the clearest way to show that you value people is to ask for their input.

Four Levels of Employee Engagement
When deciding which employees to engage, or how, keep two principles in mind. First, strategically, the greatest payoff is to be gained by engaging those employees who can add most value or who will be most strongly motivated by it. Second, no single engagement tactic will work with all employees, so it is wise to experiment.

Level One: Basic Engagement
A basic level of engagement uses motivational factors we have known about for decades, such as clear direction, good supervision, empowerment, career development, open communication, recognition and creating a great place to work. Such initiatives all involve doing something for employees, however, and are thus paternalistic.

If Herzberg is right, it is questionable whether superficial improvements can yield great productivity gains. When employees complain about poor working conditions they are defending themselves against having to admit that they feel undervalued, disengaged and have a low sense of self-worth. Needing to blame something external to themselves, working conditions are a convenient scapegoat.

Fixing these elements just pushes employees to look for something else to blame. Poor working conditions don't exist in "great places to work" but ownership is still concentrated in the managerial ranks, so nothing fundamental has changed. Employees leave organizations with a feeling of frustration often citing slow career progress but it just might be their feeling of powerlessness that is really at fault.

Employee engagement surveys tell us nothing about how employees might feel about something they have never experienced.

Level Two: Employees as Suppliers of Services
A deeper level of engagement requires a culture that encourages employees to think of themselves as running their own businesses, as suppliers of services. Most organizational cultures, being paternalistic, take far too much responsibility for developing people.

Employees should learn to see their managers as customers and be trained on how to market and develop their businesses for themselves. Such business development involves being proactive to keep abreast of the needs of key internal customers and thinking creatively about additional ways of adding value for them.

If employees were able to take on extra responsibilities for more pay, they might feel some of the ownership that small business owners feel and show greater initiative to improve organizational performance. Career development, reframed as business development, is thus in the hands of employees.

Servant leadership has been offered as a way to better engage employees, but this idea is also paternalistic because of its emphasis on serving the needs of employees. John F. Kennedy got the direction of service right when he said: "Ask not what your country can do for you, but what you can do for your country."

A culture of engagement, at this level, requires managers to treat employees as supplier-partners and to encourage a feeling of ownership over as much of the business as they want to take upon themselves. To become effective suppliers of services, employees need training and support to offer more solutions and be less dependent on managers to spoon-feed them.

Level Three Engaging Leadership
Level three engagement requires a deeper culture change because it asks managers to fundamentally reframe how they see their roles. It goes beyond level two engagement by encouraging managers to be more proactive in seeking input from employees but it also puts more pressure on employees to do more thinking and be less content to merely follow directions.

Level three engagement entails shifting from heroic, transformational leadership to a more engaging model, where managers move from being solution-generating goal scorers to facilitators, catalysts and coaches.

The level 5 leaders described by Jim Collins have humility for good reason: the world is too complex and fast changing for any one person to know it all.

Managers who base their confidence on the ability to create solutions can struggle at times to appear confident. It is easier to base one's confidence on the ability to ask a small set of repeatable facilitative questions. It's not a matter of never scoring any goals. Comparing business to sports, it's like being a playing coach rather than sitting on the sidelines just coaching.

Solution generators ask factual questions to understand the issues so they can develop their own solutions. By contrast, engaging leaders solicit ideas rather than facts by asking variations of: "what do you think?" such as:

• What do you see as the main issue?
• What do you see as options for dealing with this problem?
• What is your preferred option and why?
• What are the benefits, costs and risks of your preferred option?
• Who else needs to be involved?
• What will it take to execute your plan?

Engaging questions need not be confined to brainstorming sessions or quality circle meetings. Managers can ask such questions whenever team members come to them with a problem. Managers need to reframe their role from authoritative decision maker and answer giver to that of catalyst, facilitator and coach.

To achieve this level of engagement requires managers to give up some of that they most love doing: immersing themselves in substantive business issues and solving challenging strategic problems. It is not enough to ask employees how they might solve their own work-related problems.

Employees who are interested in a deeper level of engagement need to learn more about business strategy so they can be drawn into higher level discussions about fundamental business direction. This is a harder level of engagement to achieve because it deprives managers of some of the ammunition they use for their own career success. In future, they need to be rewarded for team success more than for their own great ideas and decisions.

Level Four: Beyond Ownership to Passion
Level four engagement involves an even more significant culture change. Now, instead of viewing employee ideas merely as good suggestions, their contributions are reframed as bottom-up leadership. Greater confidence is thus required of employees to challenge their bosses while managers need to develop more receptivity to being challenged.

This move engages employees by making them feel a stronger sense of providing direction to the organization, or at least a small part of it. The feeling of showing leadership can create a stronger sense of ownership than can merely making a suggestion.

Naturally, people are most passionate about their own ideas. When employees promote new products or process improvements to their bosses, they often display much more passion than they do for their regular work. There is a strand of our complex concept of leadership that entails challenging the status quo in just this manner. Leadership is a romantic notion – people like to see themselves as leaders for the same reason they want to emulate their heroes in sports, music or the movies.

It is one thing to encourage employees to develop and promote a better way, but the motivational icing on the cake is to see such initiatives as leadership – bottom-up thought leadership.

A good example is the Sony employee who invented Playstation and influenced his senior management to develop it. Such leadership is similar to that of Martin Luther King, Jr. and Mahatma Gandhi who challenged their respective governments to change; King to improve the treatment of African Americans and Gandhi to gain independence for India from Britain. The key trait for showing such leadership is the courage to speak up for one's beliefs in spite of the potential risks.

Leadership shown bottom-up is pure leadership because it is totally distinct from management and position. King and Gandhi had a leadership impact on their respective governments without any involvement in managing the implementation of their proposals. The same is true of bottom-up leadership. The empowering feature of this type of leadership is that even those employees without any inclination or talent to be a manager can still show leadership in the sense of promoting a better way.

The culture change required to fully implement this level of employee engagement entails recognizing that much of executive activity is really management, suitably upgraded as a nurturing, supportive, coaching function. On this view, executives only show leadership when they too promote a better way. When executives operate in facilitative mode, using engaging questions, they are really using a managerial technique, not showing leadership. Thus, engaging leadership, as described in level 3 employee engagement, is really engaging management.

The challenge for executives, if they want to achieve such a passionate level of employee engagement, is to relinquish their monopoly on leadership. They need the humility and emotional intelligence to shift their identity to one where they call themselves executives who only occasionally show leadership. Making such a major mind shift requires executives to put aside their own ego needs and see the potential for employee engagement of sharing the leadership load.

Quick Wins
Culture change can be time consuming and expensive but it is possible for at least some managers to become more engaging with minimal effort. However, they need to reposition their roles as catalysts, coaches or facilitators to their team members to avoid violating employee expectations that managers must be answer givers.

Managers could also selectively encourage some team members, those they feel would be most receptive, to start thinking of themselves as self-employed service providers. A pilot project could verify the productivity gains of such moves.

Reducing the Gap Between Dependency and Empowerment
As organizations move through the four levels of employee engagement, they increasingly reduce the gap between dependency and empowerment. Heroic transformational leadership concentrates the psychological sense of ownership at the top and maximizes dependency in everyone else.

Recognizing that leadership can be shown bottom-up goes a long way toward equalizing this balance of power, thus creating more shared ownership and a stronger group effort to help organizations prosper. The three deeper levels of employee engagement share an important feature: they all engage the brains of employees and stimulate them to do more thinking for themselves and for the good of the organization.