news

            
Articles

           
            
Engaging employees: making line managers linchpins

           
Performance appraisal article in The HR Director - September 2009 written by Betsy Travis, Senior Consultant - ETS

In the face of a major recession, we need our workforces to be highly engaged, committed and contributing to their organisations' survival and ultimate success.
Old certainties that have guided HR directors are no longer reliable -'intention to stay' is now less valid as a measure of engagement given employees' greater desire for job security and the lack of alternative employment opportunities. To meet these new challenges, ETS reviewed collective data from 60 surveys over the last two years to uncover lessons about engagement and performance. The benchmark data from some 175,000 respondents allows us to highlights four sectors: leisure, manufacturing, professional services and financial services, which have been affected in different ways by the recession.


    
Old certainties that have guided HR directors are no longer reliable -'intention to stay' is now less valid as a measure of engagement.

          
             
How then do we increase employee engagement and performance in these troubled times? Through ETS's work with cross-sector client organisations, we see that the drivers of high engagement differ from organisation to organisation with a few broad patterns between industries. Of the issues affecting the employee experience. ETS has identified three areas of particular relevance from the data, which are presented below, supported by commentary by leading HR professionals:	

              

               1: Objective setting - the clarity of objectives both at the company, departmental and the individual level and how corporate objectives are cascaded through the organisation

               2: Performance appraisal - this is the process itself. the way that it is managed and the way feedback is given

               3: Training and career development - satisfaction with training and development opportunities available and the perceived fairness of the promotion system.
             

           


The HR director can plot a course to increase engagement and individual performance through exploring these areas as they apply to their organisation's unique circumstances.
	

Engagement literature stresses the importance of having strong organisational vision and clarity in goals to ensure an engaged workforce. Therefore, knowledge of objectives and effective objective setting becomes an essential part of any programme concerned with increasing engagement and aligning goals.
	

Dr John Mahoney-Phillips (Leadership, Performance and Talent Team, UBS AG), gives an insight: 'A major source of dissatisfaction is the clarity of objective setting and the extent to which the appraisee is involved in the setting and on-going review of achievement against objectives. You only have to think about all of the research on goal-focused behaviour to appreciate the importance of goal clarity.'
	

In terms of sector differences, employees of financial services and leisure companies are confident that they know what their employers are seeking to achieve, but this is less true in professional services and manufacturing firms. There is a notably large difference between the employees that consider themselves the least (manufacturing) and most informed (leisure) and this pattern extends to departmental objectives.
	

Getting buy-in to objectives works better when the communication is two-way. Most people do not like simply to be told what to do. They want to be involved in helping determine what goals make the most sense for them, given the company's strategic objectives and their personal needs and capabilities. One technique is to use 'cascading goals' which allows organisational leaders to set strategic objectives and then communicate these to people throughout the organisation. Employees can then set their goals based on their managers' goals. This alignment allows individuals to see a clear link between how meeting their own objectives helps the company to meet its corporate objectives. This clear link
has been found to be very important in developing high levels of employee engagement as it allows employees to see the impact their
own work has on the company as a whole.
	

A common finding across sectors is dissatisfaction with the performance appraisal system among nearly 40 percent of employees, a significant minority that rises to a majority in the manufacturing sector. This is important as research has shown that performance appraisal is an important driver of engagement, as it helps to both involve and value employees which, in turn, helps to increase engagement levels. Due to this link, performance appraisal and objective setting, which is a critical part of good performance appraisal, as outlined above, are key aspects of working life that need serious attention if engagement levels are to be maintained or improved.
	

Employees of professional services and manufacturing companies are less satisfied than the all-employee benchmark. Appraisal can encompass a wide range of activities from goal setting, through appraisal and coaching to reward, so reasons for this can be similarly wide- ranging. It is striking that employees of financial services firms say that they are highly motivated to achieve. This sector outperforms the benchmark in several of the areas reported here. These organisations are highly structured around procedures with clear objectives and targets. They often have high-performance cultures leading to high-pressure, demanding roles.
	

Dr. John Mahoney-Phillips highlights what he describes as his 'growing belief that rewards need to be much more closely related to longer- term performance at both the organisation and individual level. This puts a premium on good performance management practices and emphasises the importance of core managerial skills -setting and reviewing objectives and giving performance orientated feedback."
	

Appraisal should be an ongoing process, not a meeting.


Charlie Keeling (HR Director, Field Fisher Waterhouse LLP) sees a common failing among professional services firms: "A combination of too much emphasis on an annual, formal process, as opposed to more frequent informal feedback,
and the impact on chargeable time, lead to unsatisfactory processes and systems in this important area. My own feeling is that the higher performing professional firms will be those with regular, informal feedback processes." Neither is appraisal part of the daily process of managing a manufacturing business; it's seen as 'extra work' that does not always lead to direct outcomes, according to David Bellis (HR Director, Johnson Matthey). He also highlights that many managers find the formal nature of appraisals threatening.
	

The Group HR Director of Land Securities plc, Angela Williams, records how investment in HR processes has resulted in healthy scores for appraisal: "All our performance measures are aligned with business objectives at the individual, business unit and group level. Employees can see that their contribution makes a difference."
	

Training and career development is another theme that has been identified in engagement literature as a key driver of engagement. Financial services and leisure sector employees are satisfied with their opportunities for career development. In manufacturing, the picture is significantly different, with employees frustrated about promotion, training and development and career development. In ETS's experience, most employees value career progression and opportunities for development, which will mostly take place as part of daily roles. This suggests that companies who create strong and open internal job markets and a developmental culture are likely to find that employees are more positive about performance appraisal.
	
            
Rewards need to be much more closely related to longer-term performance at both the organisation and individual level.

        

Many companies benefit from an online resource that allows managers to search CVs and allows employees to see available roles. This improves the perception and visibility of career opportunities. Leading companies have created a 'My Profile' area in their performance appraisal system or on their intra net so that every employee can record their career history, qualifications, mobility and career aspirations.
	

In leisure firms, opinions on careers and promotion vary depending on whether employees have an operational or support role. Helen Frewin (Gala Coral) explains, “lf you're working in a betting shop, the career path is shop manager, area manager, regional manager. You know the training programmes and promotion criteria on the career path. In support functions across the industry, it is a lot less clear how it works”
	

Charlie Keeling accepts that promotion and careers are well catered for in professional service firms “Advancement is fairly fast, and expected, in a sector where people are much more focused on developing themselves. There are still consistency issues though.”
	

A transparent promotion mechanism will gain employees' trust. This whole topic requires transparency, according to Angela Williams. "It's not a question of 'fair' or 'unfair', it's about being clear about the skills and behaviours needed to develop through the organisation. Moreover, our managers and employees have the tools they need to succeed," she says.
	

This perceived fairness, referred to in the literature as 'Perceived Organisational Justice' has been found to be very important to engaging employees. David Bellis points to the wider socio-economic dimension to these issues. Since many manufacturing roles tend to be less skilled, individuals may feel less likely to be developed and get promotion. “The limited number of manufacturing job opportunities in the wider employment arena may influence these perceptions” he notes.
	

What to do? Managers may be the answer, but they're not a quick fix. The immediate line manager is recognised as the most direct route to achieving engaged employees. At their best, managers help employees feel supported in their day-to- day work, career development and wellbeing. The ETS results show that line managers are very well regarded, leading ETS to ask if line managers could be the key to addressing the issues raised above.
		

The line management of professional services firms is recognised as being supportive. Charlie Keeling suggested that “A lot of development effort has been oriented to this over the past five to ten years”. Angela Williams agrees that managers are very well regarded at Land Securities, but highlights the years of focused effort that were required. “It's to do with the amount of investment put into leadership development and about giving managers the tools to manage effectively” she says.
	

Employees in manufacturing scored their managers rather more poorly, which David Bellis suggests may have a cultural dimension: most manufacturing operations are focused firmly on output and volumes which often supersede the need for managerial support and appreciation. Helen Frewin highlights how a customer-focused culture can breed a supportive management culture, saying that, "The emotional intelligence we employ with our customers is also applied to people management”.
	

Line managers need to connect employees with the strategy. Since performance improvement in most jobs is primarily a result of learning from on-the-job experience, line management plays a key part in helping individuals to understand how and why they should change their behaviours. John Mahoney-Phillips notes: “Local managers should feel encouraged but they also have a greater responsibility to create a clear line of sight between local goals and corporate objectives”
	

Helping managers to manage better can be achieved through coaching and ongoing feedback, raising their self-awareness through gathering and interpreting muIti-rater feedback. At some of ETS' client companies, individual line managers' engagement scores are part of the performance appraisal process as are multi-rater feedback ratings. 
	

Performance appraisal, training, career development and immediate management have all been identified as key drivers of engagement. The data collected by ETS show that there is room for improvement on all of these areas. The results demonstrate a different picture across sectors: leisure was found to be strongest on objective setting and training and development, while financial services was the most favourable on its fair promotion system. Professional services were the most positive about line managers while manufacturing consistently had low scores across many of these themes.
	

The drivers of engagement highlighted in this article are underpinned by the need for high quality management practices, particularly at line management level. Leadership, effective management (including performance management) and career development and training are all aspects of the work environment that organisations can seek to control and improve, all of them have an impact on engagement and performance.
	

However, ETS firmly believes that there is no 'one size fits all' model of engagement nor that a 'quick fix' can be applied. Therefore, ETS recommends that HR directors seek to understand better the engagement drivers in their organisation and sector. This analysis should lead to remedies that are tailored to the specific circumstances of their organisation. Only then can HR directors be confident that they are recommending and taking the appropriate actions to restore engagement and drive performance in these challenging times.
	


Betsy Travis, Senior Consultant - ETS