The Importance of the Annual Employee Survey

The Importance of the Annual Employee Survey

‘Engagement has quickly become a leading buzzword in today’s corporate environment. Seventy-eight percent of business leaders say it is both an urgent and important priority (Papay and Santille, 2014).’

Look at the proof. All core business measures—profitability, productivity, customer satisfaction, quality, retention, and sales—are significantly higher at companies with a concentration of engaged employees. Employee Engagement has been shown to increase net profit margins up to 6% and lead to five times higher shareholder returns over five years (Kruse, 2012).

Employee engagement occurs when a workforce demonstrates behavior that is congruent with organizational goals and objectives (Erickson, 2005). Engaged Employees are conscientious about their work, enthusiastic about what they do, and are committed to maintaining a high level of performance (Macey and Schneider, 2008).

Engagement transcends both satisfaction and happiness, moving into a level of intense emotional commitment to the organization. Engaged employees do not merely work for a paycheck; they work on behalf of the organization. Engaged employees demonstrate discretionary effort, meaning they willingly take on responsibilities that are above and beyond their job description.

Unproven theories abound on ways to harness the power of employee engagement. In his recent article, ‘It’s Time to Rethink the ‘Employee Engagement’ Issue,’ Josh Bersin states that ‘The days of the annual engagement survey are slowly coming to an end…’ To justify this position, he proceeds to describe a process by which burnout, not engagement, might be measured by analysis of peripheral employee behaviors, such as mapping data mined from employees playing videogames to identify problem-solving capabilities. Perhaps the giant Google has the resources to undertake such a study, but for the rest of us wanting immediate improvement in our employees’ behaviors so that we can reduce turnover, increase productivity, improve both employee and customer satisfaction, and drive increases in our financial performance, the process proposed by Bersin is simply too expensive and too slow, if in fact it would work at all.

The theory Mr. Bersin posits under the pseudo-scientific guise of ‘People Analytics’ is simply that: a theory that lacks scientific proof or even support. Compare this to the decades of empirical research that proves Employee Engagement drives Customer Satisfaction, and Customer Satisfaction drives Financial Performance, and it is no wonder no one is jumping on the Bersin band wagon.

The theory according to Bersin focuses on behaviors, rather than cognition, in sharp contrast to Best Practices in Employee Engagement research which focus on the cognitive attitudes, opinions, and beliefs that drive employee behavior. Address these psychological constructs of perception, and you change employee behavior. Address the behaviors of decision making based on observation of employees playing video games, and what do you have? We’re not entirely sure, but we are certain it will detract much more from your profit margin than it will add, and that this will be the case for many years to come, if indeed, the theory is ever proven.

In addition, the Bersin theory assesses individuals, which raises serious concerns of anonymity and could become an ethical quagmire. Employee Engagement theory and best practices gather individual opinions from individual employees anonymously for the sole purpose of gathering enough opinions to establish the facts about the organization. The facts about the organization are then used by Organizational Psychologists for Organizational Development, through which employee engagement is improved on a company-wide basis.

To this end, the most effective methodologies are cognition focused, which is the precursor to behavior. The National Business Research Institute (“NBRI”) analyzes thinking and predicts employee behavior, rather than analyzing peripheral behaviors in an attempt to predict cognitive factors. Indeed, when we look at the enormous body of literature on the subject, the Root Causes of Employee Engagement have already been proven. They are not videogame behaviors or after work social interactions as Bersin proposes. They are Job Satisfaction, Managerial Relationships, and Culture.

Job Satisfaction measures employees’ contentment with their work, which subsequently influences their psychological attachment to the organization and their job role. Many factors both contribute to and act as markers for Job Satisfaction, such as Benefits & Compensation, Training & Career Advancement Opportunities, Morale, Recognition, Work Life Balance, and more.

Managerial Relationships explores the security of the relationship between management and employees, and the extent to which employees trust management and feel valued by the organization. Many factors contribute to and act as markers for this Root Cause of Employee Engagement, including Management Style, Supervision, Communications, Company Image, and more.

Finally, Culture assesses employee perceptions of the working environment, and the extent to which employees believe the organization is a good place to work. Factors driving Culture include perceptions about Teamwork, Climate, Quality, Customer Service, Safety, and more.

Many brilliant business people do not understand psychological research or organizational behavior and fail to realize the complexities of the myriad of organizational dynamics that act so powerfully on employee perceptions and drive their behavior. A valid assessment of organizational health simply cannot be made with only 12 questions, for example. We may all prefer the brevity of such an instrument, but it would be better to spend no money at all than to waste it gathering insufficient and misleading data.

Since 1982, NBRI has provided well-established Best Practices of Measuring and Managing Employee Engagement, and these include not only measuring what but also explaining why. It is only when armed with the why that organizations can act, and survey information without action is just another interesting read. To know why your employees are satisfied or not, why they trust management or not, and why they like or dislike the work environment, a greater breadth of information is required. To exclude important factors in the research study in the interest of brevity is to risk failing to identify the Root Causes of Employee Engagement within your organization. Such failure renders any expenditure of time and money a waste. Best Practices dictate that the ideal amount of information may be obtained with 50 to 60 questions, and that gathering it annually affords users the opportunity to affect the maximum amount of organizational improvement.

The importance of the annual employee survey cannot be overstated. Managers today have come to realize that information is power. What employees think is not something to be feared; it is something to be harnessed. Today, employee and customer feedback systems are requirements for ISO 9000 Quality Certification, and no executive wants to run an organization without a firm grasp on the two most important human factors controlling their destiny: the thinking of their employees, and the thinking of their customers.

The organizational dynamics discovered by NBRI in the early 1980s are universal to all organizations, and are faced daily by all employees in all companies in all industries. These universal organizational dynamics are simply called ‘topics’ today, and the research instruments – the survey questions – written by NBRI Organizational Psychologists over the last three decades are the best practice instruments most commonly used by the majority of practitioners of survey research. It is precisely how an organization expresses these universal, organizational dynamics that makes each organization unique, and defines whether they are depressing or enhancing the engagement of their employees.

Very rarely does an organization do well in all areas. Most do well in some areas and poorly in others, making the Annual Employee Survey a management tool of the highest importance. Tantamount only to customer and financial information, the Annual Employee Survey is irreplaceable as the only means by which management can literally read the minds and manage the behaviors of hundreds or thousands of individuals at once. There will always be individual differences in one employee’s engagement level versus another employee’s engagement level, and over such factors, management has no control. Indeed, even highly engaged employees have ebbs and flows in their engagement levels, as moods, circumstances, personal events, and more affect each individual differently. The factors management can control to affect widespread enhancement of engagement within their organization must be accurately measured and managed, and this is the purpose of the Annual Employee Survey.

To understand the thinking within an organization, it is important to compare one’s own organizational performance with employees in similar organizations within one’s industry. It is specifically the comparison of how an organization expresses itself versus how other organizations express themselves that defines whether an organization is performing well or not. This is called Benchmarking. Benchmarking is the only means by which an organization can understand the engagement levels of their employees scientifically and objectively. Benchmarking is only possible when organizations across an industry use the same survey questions with their respective employee populations. After over 30 years of gathering data on the same high-quality research instruments (survey questions) from thousands of companies and millions of employees, NBRI has proven that an organization’s expression of these ‘soft’ human factors are inextricably tied to its ‘hard’ financial performance. Clearly, this is the end goal of the Annual Employee Survey: that the survey be used for the measurement and management of employee engagement because when engagement is high, organizations are financially successful.

There are literally thousands of theories about Employee Engagement, and just as many ways of defining and assessing it incorrectly. There is only one way Employee Engagement can be measured and managed correctly, and that is by adhering to Scientific Psychological Research principles. It is these principles that protect the purity and integrity of the data, and upon which many executives base multi-million dollar decisions. Without adherence to scientific research principles, survey research provides Clients with false, misleading misinformation. With no warning signs, there is nothing to alert users of the contamination of the data, and organizations are often worse off for having conducted the research than if they had never surveyed at all. So, while it is highly important to conduct annual employee surveys, it is even more important to ensure that they are conducted properly.

Of the hundreds of Best Practices established for survey research by NBRI, there are four that stand out as most important. They are:
– The Annual Employee Survey must be executed as a Scientific, Psychological Research Study.

– Benchmarking is an absolute necessity in any study in order to understand the meaning of any score. A Benchmarking Database is only valid if it is a representative sample of employee thinking within your industry.

– Beyond the Descriptive Statistics provided by Benchmarking Data, keen insights result from utilizing Inferential Statistics that are appropriate for Psychological Datasets, which identify the Root Causes (the ‘why’) of Job Satisfaction, Managerial Relationships, and Culture – or lack thereof.

– The most important phase of every study is Taking Action, and it is imperative to have a clear path of action before ever launching a study, clearly understanding the who, what, when, and how action will be taken in response to survey results, such as NBRI’s powerful and proven Continuous Improvement Process. Without this, morale may actually be damaged as a result of conducting the survey instead of improved when employees see nothing come of it.

As a tool for gathering the opinions of 100s or 1000s of employees, there is no substitute for using a proven Employee Survey Vendor. As the defining characteristic of overachieving employee populations and organizations, there is no substitute for Employee Engagement. This is not likely to change any time soon.