The Science of Engaging People
By Grace Swanson
When I go to conferences or read articles talking about the use of incentives, recognition and awards, I sometimes wonder if these people have ever worked at the front lines of business. Look at the websites of most incentive and recognition suppliers, and you'd believe that the secret to business success is to offer people exciting prizes, plaques or gifts. If simply using
merchandise, travel and gift card reward and loyalty programs could create a sustainable high-performance, high-quality culture with superb talent and customer retention and high net promoter scores, this industry would be as big as the advertising or management consultant marketplace.
In fact, while rewards and recognition do play an important role in engagement—read on—people are highly complex beings with many motivators. The best and most sustainable results almost always result from addressing engagement from a holistic standpoint that addresses all key levers of engagement in a systematic way. The incentive and recognition field can achieve greater results for its clients and impact on the marketplace if it puts the emphasis on helping organizations develop truly effective, measurable programs that make an emotional connection and tell a meaningful story over time.
Let's face it: The employee engagement movement so far has failed, and it's not the fault of the incentive or recognition industry. Despite thousands of speeches, dozens of books, and billions spent on employee engagement surveys, incentives, recognition and training programs, engagement levels have barely budged for years. Annual surveys of employee engagement by Gallup have yielded almost no improvement over the past 10 years, with no more than 40 percent of employees describing themselves as engaged at work. General customer satisfaction has not risen from the low 70 percent range in the same period, according to the American Customer Satisfaction Index. Most people still report that they suffer from Monday-itis, despite the new focus on perquisites, suggesting little change in the overall employee experience. Obviously, the current approach doesn't work, and there's enormous potential for solution providers that can solve the problem.
What's needed, I believe, is the same approach used to implement such concepts as total quality management and lean manufacturing: a strategic and systematic approach that involves and enables and, yes, rewards and recognizes, employees. Currently, the field of engagement is much like the world of quality management in the 1980s: There was lots of talk and excitement about such concepts as continuous improvement, quality circles, statistical process controls, "management by walking around," etc., and the industry was full of suppliers with different "proven" solutions. In fact, despite the hype, the levels of quality in American manufacturing did not increase significantly until several years after ISO released the original 9000 quality management standards in 1987. These standards set many organizations on the path to tremendous gains in quality and productivity. Even the many companies that follow ISO standards halfheartedly because a customer requires them to be certified gain the benefits of having a systematic, auditable process—an approach that addresses leading indicators of success or failure in a proactive way. The quality management field has grown even larger as a result of ISO standards.
In 2008, the Enterprise Engagement Alliance identified the need for and developed a strategic and systematic approach to engaging all stakeholders it called "Enterprise Engagement." The distinguishing element of this concept was that organizations should have a strategic, proactive engagement process that connects all stakeholders—customers, employees, distribution partners, vendors and communities—and that it should align and integrate the tactics of engagement that so often are siloed in organizations. This includes the brand and culture development process, leadership recruitment and training, assessment and feedback, job design, communications, learning, community and diversity, innovation and collaboration, loyalty and incentives, rewards and recognition, analytics, technology and more.
In 2012, ISO, the International Organization for Standardization, issued the first Quality Management Principles that specifically included the importance of engaging all stakeholders in a systematic way—customers, employees, distribution partners, vendors, communities—anyone touched by an organization's activities. Shortly after, ISO issued ISO 10018 quality people management standards based on those principles. In 2015, ISO added new Annex SL requirements to 60 ISO standards, including ISO 9001 quality management and ISO 45001 safety management standards that specifically require the CEO to lead a strategic and systematic approach to addressing the needs of all stakeholders.
If that were not enough, the ISO Human Resources working group has produced 12 standards and guidelines on human capital management, including the ISO 30415 guidelines for the disclosure for human capital, which received considerable pickup in the business media worldwide. More than $17 trillion of investment capital is now managed by advisers specifically seeking out companies that invest in people. CEOs are increasingly accountable for a formal approach to managing human capital, and if they are not, they are cheating at solitaire. This is a good climate for the many solution providers that can help them.
What ISO concluded about quality people management is simple to say, not easy to do: The best results will come when managed by a strategic and systematic approach that connects the dots between the brand, culture and objectives, and all the people and processes involved, into a seamless auditable process with a clear scorecard. Whether or not an organization sees a marketing benefit to gaining ISO certification such as ISO 10018 for quality people management, it can profit by applying a systematic process it can audit on its own.
The challenge is that most organizations do not have a strategic and systematic approach to engaging all stakeholders. Most use many of the necessary levers of engagement mentioned above, but quite often they are divided by siloes with little return-on-investment measurement or clear idea of how the benefits of those individual activities roll up to achieve key organizational objectives while supporting the brand and culture. Without a framework, as with quality management before the era of ISO standards, organizations waste time and money on internal struggles for resources rather than a fully aligned focus on what's good for the organization.
Since all the engagement tactics mentioned above have value, without an overall framework, an organization's people management strategy design becomes a struggle for resources based on the opinions of different executives, and proponents can always come up with an argument for why one tactic works better than others. For instance, if I relied on my experience, I could argue that there is no need for rewards and recognition, because I have personally witnessed significant improvements in quality and productivity simply by creating a culture of involvement, empowerment and a sense of ownership in one's work. Yet, with so many years of experience, it's clear to me that people are complex and that a comprehensive effort is needed to create and sustain a culture of continuous improvement and quality experiences for all stakeholders, including the use of rewards and recognition appropriate to the culture and situation.
So what does this mean for the incentive, rewards and recognition, and loyalty businesses? It means a big opportunity because the era of helping CEOs manage a strategic and systematic approach to engaging all stakeholders has just begun, and no "industry" owns this new field.
If the incentive, recognition and loyalty industries are true to their names, they'll step back and use all the research published over the past two decades to help organizations devise, implement and continually improve processes that help us all profit from a more strategic and systematic approach to engaging all the people critical to success.