Engage Employees Part 1: Why engage employees? Just stay focussed on business.

I have been seeing significant discussion on employee engagement and the futility of it. I completely agree with all those who think we should not engage employees and instead stay focussed on business.

I recall meeting the Managing Director of a large cement manufacturing company during my consulting days, who told me that cement was produced by kilns and not people. He told me that investing in employee engagement was good for businesses where factor of production was  people- typically service industry. I told him that I completely agreed with him and requested him to educate me if he had patented kilns that his competitors did not have access to. I further asked him if that was the reason- his company was making huge profits while the others were not. He went on to explain to me that the kilns were manufactured by four companies in the world and all the cement manufacturers had similar kilns. He further explained that kilns ran on their own for 300 days and at that level of production plants made a loss while at 345 days of production plants became highly profitable. On asking him if all the plants of his company were operating at 345 days, he answered in the negative. When I wanted to know the difference between high performing plants compared to others, he told me it was people. He further said that while they hired people with similar qualifications and experience, the motivation levels and passion, especially of plant leadership team, made the big difference. Needless to say that he went ahead with a program to engage employees, including leaders.  The employee engagement program was a result of MD’s focus on business and to ensure consistent and sustained plant performance.

Clearly, there has to be a business reason to engage employees. We should remember that hr is owned by business and not by HR. Therefore any intervention that does not address business issues will not stick.

As we discussed in earlier posts, PMS is a business tool and differentiation is key to high performing organization. At the same time this could generate significant heat and friction between the employees and leaders; and leaders and the board representing the shareholders interest. This calls for some cushioning effect to convert the friction into passion and motivation which will help sustain high performance over a long time. Employee engagement provides the cushioning effect.

There is enough debate on whether business performance is correlated with employee engagement or which one is a lead factor and which one is a lag factor. But there is enough research and experience to demonstrate that engagement is a lead factor and performance is a lag factor.

If a bottleneck in business can be identified, quantifying the business benefit of employee engagement becomes easier.

A word of caution: Engagement without strong performance management could lead to a country club culture. Engagement does not mean keeping employees happy, it means keeping employees motivated and passionate about work.