Employee engagement is an issue that the big corporates invest money and resources into as they know the value to their businesses of low staff turnover, having a fulfilled team and a rewarding work environment.
But for busy small-to-medium business owners, the issue of employee engagement may not get the focus it deserves as it’s pushed to the bottom of daily challenges.
A recent survey, The State of the Global Workplace, from international research organisation Gallup found that only 24% of Australian and New Zealand staff were “engaged” in their role.
Although Australia’s ratio of engaged to disengaged employees ranked amongst the highest of global regions surveyed, at 1.5:1 (and just behind the USA and Canada’s 1.6:1), there remains significant room for improvement. Particularly when you consider that engaged staff are “emotionally invested in and focused on creating value for their organisations everyday”, whilst disengaged employees are “negative and potentially hostile to their organisations”, according to Gallup’s definitions.
Mastertek chief executive Jamie Anderson, an expert in employee engagement strategies, has consulted to dozens of SMEs grappling with this issue. He says that taking the time to focus on improving engagement can increase productivity, lower absenteeism and reduce high turnover rates.
“There are four strands of employee engagement to acknowledge,” he says. “Having a common purpose, availability of personal development pathways, regularly discussing progress and performance, and of course offering fair and reasonable levels of pay.”
Here Anderson reveals how to use these four elements to lift engagement levels in an SME.
The foundation of an effective employee engagement strategy is defining a clear ‘common purpose’ within the company, Anderson explains.
“A small business owner will likely have a clear understanding of the company’s ‘higher purpose’, but this needs to be clearly translated to staff,” he says.
“You need to regularly communicate why the business exists and why it is different to competitors and what the value proposition is for your customers.”
He says this clear communication helps employees connect to the idea of the business as a whole, rather than viewing it as “just a job”. It can help people see where their role fits into the bigger picture, in turn enhancing their sense of commitment and ability to value the contribution of their own roles.
Coaching managers to be good at communicating this purpose and helping each person see why their role is important is a vital investment, as it helps reinforce that each person’s contribution really matters.
Offering clear personal development pathways is also a fundamental ingredient in increasing engagement, Anderson says. On-the-job learning, development opportunities and management career advancement all help.
“SMEs can struggle with this aspect,” Anderson says. “Small businesses have a great opportunity to offer their people a chance to expand beyond their normal boundaries, for example through job swap or job share initiatives, or by offering mentoring and coaching.”
Anderson says implementing pathways to personal growth is a great way for SMEs to offer a competitive advantage, especially if staff can progress faster than they would at a bigger company and feel more integral to the success of the business.
Annual performance reviews can often be approached by employees with concern about the potential outcomes, which is unhelpful from an employee engagement perspective. However Anderson says this is another opportunity for small businesses to improve performance by using better practices that increase engagement levels rather than create negativity.
“People want to know, how is my effort contributing to the success of the company and our common purpose?” he says.
Anderson recommends making regular performance discussions and refining the nature of the conversations. Rather than focusing on formal critical reviews, talk about what the staff member needs to focus on to support the common purpose of the business, and discuss how they can contribute further.
This can help people feel more fulfilled whilst also offering a basis for discussion of what improvements might be needed in order to be more successful in the future.
There is no denying that pay matters, but Anderson highlights that it is not necessarily a key motivation.
“Top reasons people leave an organisation include their relationship with their boss, the lack of opportunity for development and third or fourth on the list is pay,” he says.
“Of course we do need to feel we’re paid fairly for what we’re doing, but it is not always the biggest driver of engagement by any means.”
SMEs can’t necessarily compete with the big corporates on pay alone. However, determining what is ‘fair’ can be a challenge. Anderson says that a regular assessment of the market to see where your staff fit on the pay scale is the first step.
Beyond salary, well designed incentive plans can be effective in some instances, but he says ‘recognition programs’ can potentially be more successful in fostering a culture that reflects the owner’s vision for the business. These programs can show appreciation for a job well done more regularly, and often in a more personalised way than typical incentive plans.
For more information on actively increasing employee engagement or to request a free consultation, visit Mastertek.