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Donkin on Work - Loyalty

October 2007 – Knowing your employees

How well do companies know their employees? The answer, according to a forthcoming study from Watson Wyatt, the Human resources consultancy, is not quite as well as they think they do.

The research* to be published next month, based on a survey of 15m people across 22 countries, reveals that employee and management concerns across the world are much the same, and so are the misconceptions.

The study found some pointed mismatches between employer and employee perceptions. Employers, for example, failed to grasp the importance attached by employees to the nature of their work. This intrinsic satisfaction to be found in a job was overlooked by managers who believed that opportunities for career development would be of prime concern.

The distinction is important because the latter assumption relates to future possibilities while it seems that the immediate concern of employees is for the “here and now” of their work.

Some may interpret such findings as a “jam today” attitude, typical of younger employees, and they may well be right. But I believe the jam we’re talking about here is less about status and wealth – although pay remains important according to the research – and more about opportunities for self-expression.

The influences shaping these concerns have emerged in another piece of research, this time commissioned by Microsoft, the computer systems company that has looked at the kind of attributes needed for success in today’s workplace.

The most important skills identified in the Microsoft research are critical thinking and problem solving capabilities, communication skills, a capacity for team working, enthusiasm for work and self-esteem.

Stephen Uden, head of skills and economic affairs at Microsoft in the UK, believes that many of these qualities can be found in the way young people are using information technology.

“Using systems such as instant messaging, young people today are helping each other with their homework in the same way that we expect employees to collaborate on projects,” says Mr Uden.

“The education system is biased towards knowledge and the ability of people to recall and regurgitate remembered information whereas technology is promoting the ability to source relevant information quickly. This is what is becoming important among employers such as ourselves.

“Problem solving, good communications and collaborating in teams is happening all the time over the internet but these skills are not valued in the way that young people are assessed in examinations. Collaborating in exams is called cheating. Yet the first thing we want to know when people come on board here is that they will collaborate.”

Mr Uden urges more employers to forge closer relationships with their local schools in order to pass on their needs to teaching staff.

The Watson Wyatt research, however, suggests that many employers are being slow to wake up to the changing demands of the workplace and employment. Too many remain wedded to traditional assumptions behind career ladders, promotion and the chain of command.

One of the best ways to understand the concerns of employees is to ask them. Typically the way this information is beginning to feed through to managements is in the engagement questionnaire.

I still have an issue with the word “engagement” since I’m sure for most people it continues to be associated with the prelude to marriage, either that or an occupied lavatory.

But for the human resources community it has come to mean something else.
As is often the case in HR, this relatively recent use of the word has outstripped the etymologists, at least in my aging office dictionary that remains stubbornly faithful to traditional meanings such as: the act of betrothal, an appointment with an other person, an encounter between hostile forces and, lastly, not to be ignored by employers, a moral commitment.

For any large employer today, however, employee engagement has come to mean something else: something to do with discretionary behaviour, often described as a willingness “to go the extra mile,” to borrow yet another management cliché. The understanding behind this is that employees who feel well disposed to their employer are going to work harder for the good of the business.

One reason that engagement is big news in management is that research has made a link between highly engaged workforces and profit. Another reason is that companies are able to measure, using questionnaires, the extent to which their workforces are engaged.

A third reason is that levels of engagement are just beginning to be perceived among some investors as useful indicators about a company’s future financial performance.

According to a study** released this week by Towers Perrin, the HR services consultancy, most companies today seem to be understanding the concept of employee engagement.

“I think organisations are getting the hang of it. We find we can take a lot more for granted when talking to organisations about engagement than we could a year ago,” says Jim Crawley, principal, Towers Perrin HR Services.

The research, based on information from more than 88,000 respondents in 19 countries, shows, however, that while companies are beginning to grasp the concept, they still have much to do in building engaged workforces. Towers Perrin could describe no more than one in five of the employers surveyed as fully engaged.

Yet, when researchers compared engagement levels with financial performance they found a correlation between high engagement and higher net profit margins. There are savings to be made in recruitment and employee turnover costs too, because highly engaged employees are more likely to stay with a company.

So employers need to work on fostering employee goodwill, or rather they need to address the way they so often undermine goodwill. Unfortunately I don’t see much evidence of this in what I call traditional businesses – beyond the Microsofts and the Googles of this world.

Look at retailing, for example. How many shops pay their assistants for coming to work early to get the cash registers ready? Yet shop workers consistently work ahead of and beyond the allotted opening and closing times for which they are paid. They do so out of goodwill that is all too readily exploited by employers.

It’s important to get one thing straight here: there is nothing new about engagement, other than the HR meaning of the word. There is nothing new about the attitudes of young people either. Organisations have always benefited from team-working and collaboration. Nor is there anything new about the general desire among people to enjoy their work.

“People have to feel they can influence the way they work and it’s up to senior managers to ensure that every member of staff understands how they can make a difference. It’s all about knowing your people,” says Andrew Cocks, a senior Watson Wyatt consultant.

In that respect it’s pretty simple stuff. What is quickly changing in this world, however, is the element of choice through technology that is redefining the possibilities of work. A good salary still matters but great work matters more.

*Playing to Win in a Global Economy, the global strategic rewards report and European findings is published next month by Watson Wyatt,

**Towers Perrin 2007 Global Workforce Study,

©2006 Richard Donkin - all rights reserved