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Niel Jacobsen

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Could stronger employee engagement mean that managers don't have to lay off employees?

A flurry of comments on LinkedIn followed Simon Sinek's latest TED talk, with 400 taking part in the first day. I may be naive, but was there some consensus the importance of engagement?

I found that the biggest challenges for business; retaining talented people, improving productivity and finding better ways to do things can be achieved when people are actively engaged.

Research and practice show that becoming an innovative, engaging and productive workplace is complex and multi-faceted. One area where I am noticing a positive trend in these uncertain times is that good leaders are moving from Transactional Engagement (buying support) to Transformational Engagement (fostering positive contribution).

An interesting study by Kingston University’s Centre for Research in Employment, Skills and Society (CRESS) found that; "Transactional engagement was identified as being shaped by the employees’ concern to earn a living and to meet minimal expectations of their employer".

By comparison Transformational Engagement (or as CRESS describes it, emotional engagement) was about "the desire on the part of employees to do more for the organisation than is normally expected ... and in return they receive more in terms of a greater and more fulfilling psychological contract".

Clearly, doing more than is normally expected would see the employee applying discretionary effort. A "fulfilling psychological contract" could be interpreted as balanced Employment Proposition.

In reality, it is important to understand both requirements - minimal expectations (transactional) and the drivers of discretionary effort (transformational). What do you think?

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    Mar 27 2014: Thanks for sharing your thoughts Jason.

    Getting to your last point first, I agree that mutual trust and understanding is critical. Developing an thorough understanding of all the issues across the organisation is a key first first step in moving from Transactional to Transformational engagement. A colleague and have developed a simple yet effective employee engagement and feedback system where staff, managers and the senior management team have their say on the critical issues.

    As you pointed out in your second comment, knowledge management and access to the right information so people can do their jobs is a key question in our system along with skills utilisation, leadership and the management systems themselves.

    Once managers understand their employees (and vice versa) I agree they will be less likely to lay people off employees and instead, work with them to find efficiencies that will help drive productivity and innovation.

    So how critical is a common understanding and purpose in these times of recovery?
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    Mar 28 2014: The thing I find interesting here is that nothing is new, words and phrases may have changed, yet we continue go over old ground. So why don’t we become better leaders, business people and have a more engaged work force.
    IS it because the market becomes more competitive and we have less time? Wouldn’t it be nice if all people in our business believe what Simon Sinek’s preaches? “People who work for your money will take you money, people who believe what you believe will work for you blood sweat and tears”

    Thoughts?
    • Mar 28 2014: Here is my take.

      Too much money is in too few hands, and consumer debt is maxed and not growing. This has bot a serious cap on revenue.

      Unable to get revenue growing, corporations are forced to focus on cost reduction. Fewer employees working harder and longer hours for less pay.

      How do you get your employees to go along with working harder and longer hours for less pay? You try to convince them that it is more than just a job. Engagement. Give them a psychological reason to work harder and longer hours for less pay, for some silly sense of teamwork or accomplishment.

      You know... we're all in this together, except stock holders and senior management that will reap huge reward from conning you into working harder and more hours for less pay.


      In the end, it is self defeating. Businesses cutting costs via lay offs and pay cuts simply puts less money into the hands of consumers, and therefore, less revenue for corporations. It is a negative feedback loop. Lower wages causes less spending causes lower wages....



      Screw that.

      SHOW ME THE MONEY!!!!!!

      That is what the stock holders are saying. That is what the CEO and other executives are saying. And it should be what the rank and file employees should be saying!


      If you do not have a bonus tied to performance, and you buy into this engagement thing of working harder for less pay, then you are part of the problem, not the solution.
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      Mar 30 2014: I agree Ivan,
      Good leadership is vital to all the comments so far. Where are the leaders that can inspire others first and think about the bottom line second. Surely, if inspiration is the first level priority, business benefit should follow.
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    Apr 4 2014: Thanks Wayne,
    You couldn't be more right about people being different especially around their motivations. With regard to money the major surveys tend to miss the point by averaging out responses. Once a person reaches an income level where they can live comfortably, then they look to other aspects of their work such as fulfilment or extra challenges. However, until that point is reached, money is always the number one priority.

    Technology and the make up of the team together with the leadership style of the manager are all factors and this is what we endeavour to find in our analysis. Once we find and iron out the speed humps, the level of engagement tends to rise. My colleague Ivan Cunningham my have more to say about the impact of leadership.
  • Apr 4 2014: I think this discussion is missing a major point, the employee. I have been a manager for many years and each employee is different. What motivates to one is not necessarily important to another.

    1. People seem to think money is the only thing but I have seen people take other jobs for less money but money is important
    2. The technology/project is always a major factor
    3. The people you are working with, including the immediate manager who may not be an official part of the team
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    Apr 3 2014: Thanks Allan, I was particularly drawn to your comment 'being led sometimes by his/her underlings'. I think this shows just how important leadership is today in relation to employee autonomy and giving people a bit of free rein especially in a volatile market.

    I expect that it is the role/characteristic of good leaders to set the boundaries with creativity. We have just seen innovation being jettisoned by a new federal government. The role of innovation being wound back in government departments as they try to balance a budget. So I guess it doesn't just apply to the private sector.

    Downsizing is a form of transformation, unfortunately not the positive kind that I am suggesting. Maybe due to the current economic climate, transactional engagement may be here for a while yet.
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    Apr 2 2014: It depends whether a company is an innovator or just any old market whore.

    If a company is interested in innovation, then it would seek, and actively engage employee talent as a matter of course. This would involve the kind of leader that is naturally collaborative, not dominated by his/her own ego, and respectful of employee autonomy. Such leadership would not be averse to actually 'being led' sometimes by his/her underlings, and be tolerant of going through the process of several 'wrongs' to arrive at transformational ground-breaking 'rights' in terms of creativity.

    However, transformational power of creativity is something of a gamble - and gambling on several wrongs to arrive at a right in order to innovate, takes big investment and big contingencies. Too many wrongs can be ruinous, especially in an unforgiving, volatile market.

    The typical market whore will lay off employees without a second thought, and probably out of necessity. It means that it has jettisoned it's innovation resource and employee input in order to feel 'safe'. It is the kind of stasis one gets in a seemingly comfortable environment (the kind of 'this is how we've always done it in the past' mindset). The shedding of potentially transformative employee input - only to be replaced by the ostensibly transactional input of management in order to survive in the market economy - would appear to be the initial death throes of that company, because of an inability to move on. This inability is very likely a direct result of an "unfulfilled psychological contract" as you put it.

    Downsizing a large company while still remaining transformative is all but impossible because the employees that remain no longer desire to be emotionally engaged in transformational activities. Engagement and respect has been lost. This might be partly why large downsizing companies do badly, and upcoming small companies do relatively well.
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    Apr 2 2014: Hi Dino,
    This is a conundrum. If the employer has a genuine view that there is potential to keep the new hires on, then he or she should let them know. In this period of uncertainty it is probably the best they have to offer in the short term.

    A more effective approach would be to raise with the company and the union the benefits as you see them of transformational engagement. This may well get their heads into a different space.

    We find that when this happens people tend to start looking at challenges from a different perspective. Perhaps you could encourage them to work together on the issues that divide them with the common goal of ensuring that nobody needs to be laid off.

    Hope that is helpful. Regards, Niel.
  • Apr 2 2014: Neil, thanks for the link. I read on the website (Connecting with New Employees) and thought about a case study, on a company with a union shop who couldn't pay their new hires more than the shop wage or offer additional benefits because of the union contract. If layoffs happen then they are the first to go. How would you approach a company who needs to retain new talent but can't offer them more in the way of transformational or transactional engagement? I'm not looking for trade secrets just a direction to this conundrum.
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    Apr 2 2014: Thanks Dino, you have raised some really important points especially about what is overlooked. A colleague and I have developed an employee engagement strategy that looks deeply into the issues that prevent worker effectiveness. We have found through or preliminary surveys the immense benefits that can be gained by understanding where the speed humps are. If you want to see how it works check out the website at www.employmentproposition.com Thanks for raising these important aspects of employee engagement.
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    Apr 2 2014: Thanks Bilal,
    Your equations finishes with the CEO and good leadership is emerging strongly. I agree with your point about people being responsible for their own job and taking responsibility. Thanks for the feedback.
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    Apr 2 2014: Thanks Joshua,
    the Volvo experiment was heralded as a great leap forward in engagement and that quality products were the outcome. I have seen examples also of employee buy-in schemes in one form or another and they do seem to work. You make a valid point about everyone being part of it in order to be effective. I agree.
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    Apr 2 2014: Hi Saro,
    Agree that you have captured two of the three categories as I describe them. Adventurers (passionate) and Conscripts those with minimal expectations, contribution and as you say money focussed. The middle ground belongs to the Tourists. They are along for the ride but jump in and contribute if the situation and signals are clear. I believe that winning over this group in the middle though good engagement strategies can make the real difference to a business. What do you think?
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    Apr 2 2014: Sounds good to me Mike....
    Hire slowly is a message that is coming through strongly as well as engagement.

    Not being from academia myself I find that they take the time to analyse a situation but don't always articulate a clear case or solution. I guess the distinction between transactional and transformational engagement was clear and struck a chord with me. I was wondering if it did the same with others?
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    Apr 1 2014: I can always appreciate academia taking a simple concept making it so complex....
    So, lets give this idea a KISS.....
    Businesses are usually founded to provide a service or product at a competitive price and make a profit.
    Businesses have four tools to accomplish this task. A place, some raw materials, tools and employees.
    The first three are.... simple.
    Employees are usually the most expensive and most problematic. Businesses hire employees without a lot of knowledge on how the employee will be effective in meeting their goals .Businesses may change employees
    regularly until they find one that fits. They try to keep that employee until the cost of retention cuts into profits.

    So, if you are a business, hiring and firing are expenses you should avoid. They do nothing for the bottom line,
    Hire carefully those who seem to be the best fit into the business and then treat them like you appreciate them.
    .
    If you are an employee, insure that you are making money for the business. You are timely, efficient and effective in the tasks you do, your business will keep you.

    So Professor, is this response worth at least a passing grade?
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    Apr 1 2014: There are two types of employee. One who concentrates mainly on money and one who concentrated mainly on the (passionate) job. The First takes the short routes and grows tremendously by being with the management side. The Second works through innovation ad creativity but can't pass through their immediate Senior Management and goes in vein. Here minimal expectations are satisfied but where this transformational chance goes.

    If the Second are being paid off (not only money but also self esteem) for what they have done, they jumps to a different Management unit where they are compromised. The only management that satisfies the bottom line needs of the employees goes through the so called Transformational changes.

    Any thoughts?
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    Mar 31 2014: Hi Neil,

    The fundamental dysfunctional set-up of:
    "those who work in a business don't own it, and those who own it don't work in it"
    has to be addressed if you ever want to achieve genuine employee engagement. Well, it has been addressed for senior managers with share-options & bonus schemes, but not for everyone else.

    From my time at Henley Management College (U.K) in the mid 1980s-90s, I remember the Volvo experiment giving employees greater decision-making power, and thereby emotional engagement.
    However, motivation to engage more and constructively in a business will not be sustainable unless employees ALL have some share ownership or profit-sharing scheme in the business. This has been proven in many studies. After all, if share options and profit-related bonuses are used to motivate senior managers, then this is also applicable to all levels of employees. Why? Because we are all equally human.
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    Mar 30 2014: Dear Mr, Jacobsen. It's good debate, what we need a perfect company from all Angles, we are learning from our nature, let's take our brain the most powerful device in the world,

    The brain working so perfect by working cells and the perfect environment holding those cells. When all employees working like cells in our brain, The important thing each cell responsible for own job and done it perfectly.

    the company = the employees + the environment + the CEO

    if any one miss his job ---> falling the company.
  • Mar 30 2014: Most of us have a problem identifying what transformational engagement means from an outside in perspective. The question is positioned as outside in. Or the organization looking in but this confounds us because we can only answer from an inside the organization out position. For most workers implied transformational leadership are employers who engage anticipate or improve their employee's personal and work environments, ie, better chairs, lighting, temperature, safety. Work space livability. 2nd tier, telecommuting, using own communication device, employee discount. Third tier, employee benefits, matching 401K, onsite cafeterias, exercise facilities, Family health coverage. 4th tier, equity pay distribution. Executive managers pay is progressive not excessive. What is probably overlooked is work place efficiency or removing obstacles in processes that prevent workers effectiveness. Insufficient supplies and tools to complete tasks. Managers who create leadership vacuums by either being lazy or claiming employee's efforts as their own.
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    Mar 30 2014: Hi Bryan,
    When it comes to deciding who goes when layoffs are on, I think it goes back to the original message and the notion of engagement and discretionary effort. I should imagine that when it comes to the crunch, smart employers would look at the disengaged employee and show them the door first.
    • Apr 2 2014: You're old enough to remember the 1970s. In the USA, thousands of workers were laid off regardless of their level of engagement. In the construction industry in the present day, workers are laid off regardless of their level of engagement. It's a matter of profit, not engagement. Engagement might give some slight marginal advantage when there are few layoffs, but when it becomes a general problem, engagement doesn't matter.
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    Mar 30 2014: Hi Frank,
    Part ownership would indeed be a great engagement driver, nothing like have a hip-pocket interest beyond the pay check.
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    Mar 30 2014: Hi Darrell,
    Its a sad state of affairs when the situation you describe arises in a company. If you put in the extra effort in one project expectations should not follow automatically. Good leaders would see this as an example of your potential and recognise it accordingly or at least start a serious discussion about your career objectives. Then again I wrote the original comment because I see the glass is half full.

    How should companies recognise extra effort?
  • Mar 29 2014: No. Employees are not laid off due to lack of "engagement". Employee layoffs have nothing at all to do with the quality of their work. Employee layoffs happen for the sake of the bottom line,
  • Mar 29 2014: I think that each employee should in fact have part ownership of the company he works for. This way he/she is working for their own good and conflicts between unions and management would be much reduced.
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    Mar 28 2014: Some very valid points here in this discussion.
    Just to add my ten cents worth, hopefully adding some value to this conversation.
    If you can get honest engagement from both management and staff alike then the culture will ultimately change for the better and staff will be adoring about their position, productivity will improve, staff will be motivated and became passionate about their employment and employer.
    Attitudes need to change from the employee as a victim and the flip side employers need to listen to the employees as they are the eyes and ears of the business. If this would be done this would enhance trust and make all stake holders feel valued
    Question is, how to break this barrier, cycle, behaviour so that both sides can work together so that business and employees share the success and reap the rewards together.
    The best asset a business has is the employee and In a UK survey from Kaisen Consulting Ltd confirmed my thoughts, money is ranked sixth, the top three are 1.Achievement, 2.Working with others and 3.Recognition.
    Organisations need to consider tools to identify the strengths of the business along with problems that arise. There are people who specialise in creating commercial tools out there to deliver the business and an engaged work force. Employment proposition survey will enable staff who are the eyes and ears of the business to the CEO to be transparent to identify the good things that an organisation does and things that they need to improve. It becomes a valuation and should be shared with all staff. It will identify items that will need addressing whether in training or what consumers say about your business and or ways to improve your products.
    Everyone in the business needs to improve the communication from the bottom up and vice versa. The silo and group leaders need to lead, everyone needs to participate, and this will go a long way to eradicate some of the problems and improve the bottom line, engagement and culture.
    The thing I find
  • Mar 27 2014: "the desire on the part of employees to do more for the organisation than is normally expected ... and in return they receive more in terms of a greater and more fulfilling psychological contract".

    In my experience, it is impossible to do more than expected for any meaningful length of time. If you manage to do more than expected on one occurrence, expectations instantly rise to that level.

    As I have heard it stated, "Never do more than expected, or soon they will expect you to do more than you want to."
  • Mar 27 2014: I think this ":engagement" stuff is a way to get employees to work harder, longer, for less pay.

    I can see why this appeals to management.

    As an employee, I am not going to play along. I am going to produce the least amount I can get away with, for as much as you are willing to pay. Try to cut my pay or make me work longer or harder, and I will go find a different job.


    I do not feel compelled to work harder and longer hours, for less pay, to increase stock price so a CEO can get a fat bonus.
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      Mar 31 2014: Hi Darrell,
      Fair point, but what if your work was more interesting for you by being engaged with management processes? And what if you had a share in the business (there are many models where employees have some sort of profit-sharing schemes)?
      Having said that, I left a really good job in academia because I figured out I was just working for the head of the college to make him look good so he could retire on a high note.
      • Mar 31 2014: Sounds like a new name for old ideas.

        Profit Sharing: I should take a $10 pay cut, because then I might get $1 back from profit sharing. I should work 2x as many hours, because then I may get 10% higher pay from profit sharing.

        Input to the management process: We'll hold meetings and listen to you r ideas, then go with whatever is going to increase the stock price and land upper management the largest bonus.
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          Apr 7 2014: Hello Darrell,
          Am busy travelling in France/Germany/Switzerland hence delay in replying.
          You are thinking in terms of a limited pie, a win/lose paradigm. It is possible to grow a business-pie bigger so that with the right type of employment-structure, everyone both has a more interesting time working and also gets more money.
          However I read an article in a German newspaper yesterday about 2/3 people being demotivated in their jobs; the same proportion in U.K and several other European countries by the way. So it is obviously a big issue. People look for a meaningful life in meaningful work, not surprisingly since work takes up such a large % of our lives. Perhaps meaning needs to be sought elsewhere, and then that keeps work/careers in their proper place.
  • Mar 26 2014: Hi!
    Personally I think the topic is pretty intriguing,so here I wanna share some of my thoughts.

    First,as for the title, if stronger employee engagement is like Transformational Engagement which can contribute to the company,then I think manager will not be so cruel to lay off employees;

    Second,if we just talk about active engagement,well,managers care more about the OUTCOME than your degree of engagement. If a project turns out failure at last, some of the employees may still get fired no matter how actively they have engaged in working on the project.Therefore,I think knowledge management plays an important role in this process. Employees can get their work done in a better way through the process of knowledge management,which of course requires their active engagement in their work as well.

    Finally, to put it in perspective, I think the understanding of both requirements you mentioned above is based on the mutual trust and understanding of managers and their employees.Without mutual trust, employees will not have motivations to achieve more for the organization while managers will never ever know what employees are thinking about and In other words, managers can not expect to turn the transactional into the transformational.
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    Mar 26 2014: Hi Fritzie,
    Thanks for your feedback. I wholeheartedly agree with you about greater productivity for the same cost might reduce the need for belt tightening.

    In Australia, we have not experienced the same level of furlough days as in the US. But I’m sure this has a huge impact on an employee’s level of engagement and willingness to apply discretionary effort.

    What we do rely on a lot from the US, is the strong body of research and insights from people like Simon Sinek. These give us valuable insights into the challenges and pitfalls to avoid. Just this morning, I came across a Bersin & Associates survey of 834 organisations conducted in 2012.

    This showed that for employees, the most important elements of recognition, is the ability to receive specific feedback and give recognition easily. It seems that most employees viewed traditional dollar driven recognition programs as just another “top-down” management scheme.

    The survey also found that only 17% of HR professionals believed that their company strongly supported and recognised outstanding employee performance. And this is from the people that manage those schemes.

    So what else is that survey telling us about employee engagement?
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      Mar 26 2014: Dan Ariely's most recent TED talk is very much on this point of the sorts of responses to work that are most motivating for employees.
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    Mar 25 2014: I hope Sinek's talk is posted soon, as it will give participants here more context.

    While not familiar with the supporting research on this, I could certainly see employees make greater investment of time, energy, and imagination in their work if they expect the option to be employed there for some time and also have the encouragement of the leadership. With greater employee engagement and value offered, the firm ought to be more productive and successful than if employees did less of value for the same pay. Greater productivity for the same cost might reduce the need for belt tightening.

    Sinek's talk was not so much about preventing belt tightening entirely as it was about adjusting to the need to weather the troughs by the strategies common in the public sector and increasingly, I am told, in private enterprise of using across the board furlough days rather than retaining some people at full hours while laying off others.