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Whole Foods gets acquired by Amazon, and, of course, the news is abuzz about how this is going to change the way Americans obtain their groceries. However, there are also commentaries surrounding whether or not this means that the Conscious Capitalism approach taken by Whole Foods is a failure. Of course, this particular issue can be debated, but what’s clear is that being “a great place to work” does not guarantee success, regardless of what all the best employer lists might lead us to believe. Though the focus appears to be on “nailing employee engagement,” throughout much of the practitioner and business community, the Whole Foods acquisition and what has led up to it offers a warning for the employee engagement evangelists.

When examining the past five years of stock performance, Whole Foods reached its peak in October 2013, trading at over $65 per share and reached its low point in October 2016, trading at around only $28 per share. Even the boost from the Amazon acquisition of Whole Foods only bumped the price to around $43 per share, which is still almost 34 percent less than its peak price.

During the past five years, though, Whole Foods has not missed Fortune’s 100 Best Places to Work List (it finished at No. 58 in 2017), an award that largely emphasizes the perks employees receive. In fact, the four highlighted items from the Fortune survey for Whole Foods involve the percentage of employees who agreed they are able to take time off, can be themselves, are treated as full members of the company and feel a sense of pride.

What can be made of this conundrum? How can a company be performing so well when it comes to employee engagement and yet so poorly when it comes to stock price? The answer, much to the chagrin of the employee engagement crowd, is that being a great place to work is only part of the equation. When being a great place to work comes at the expense of business performance, it puts the entire company at risk.

In case you do not believe that was part of the problem, even Whole Foods CEO John Mackey admitted that the company prioritized its employees at the expense of customers, which hurt the company for several years. Employees loved working for the company, but customers were disappearing, and, long term, that is not a recipe for success.

But that’s what happens when a company is so focused on being a great place to work instead of also trying to optimize key performance metrics, such as financial performance. The belief that focusing on employees first will inevitably result in long-term viability is a mistaken one, one that Bob Corlett soundly argued against four years ago.

Employee engagement, like other types of initiatives (e.g., wellness programming) has almost taken on a panacea-like aura, with many consultants and practitioners treating it as a magic bullet that will cure all the ills for organizational performance. But there is no magic bullet, no wand to be waved. Long-term, sustainable, organizational performance requires attention to the entire business, not just one or two elements that contribute to it. While Whole Foods may have become an employer of choice, it slowly lost the mantle of grocery store of choice for many of its original customers. And that is a lesson from which many organizations could learn.

Photo Credit: https://www.flickr.com/photos/brokentrinkets / CC BY-NC-SA 2.0

Engagement’s in a dire state! Workers are disengaged! Employees are going to turn over in droves! If you read much of what is written about engagement in the workplace, that conclusion might seem obvious.

However, the results from the American Psychological Association’s 2017 Work and Well-Being Survey offer a different take on this topic. As it turns out, 31 percent of American workers report experiencing work engagement fairly often (at least once a week but as high as every day), falling into the high or very high categories, and 47 percent report experiencing engagement an average amount of time (defined as somewhere between “a few times a month” and “once a week”). Only 21 percent reported experiencing work engagement less often than that.

On a 7-point scale (ranging from 0 to 6), the mean score for respondents in 2017 was 3.83, and, as I recently pointed out in a previous post regarding past data, these results represent a fairly normal distribution with a slight negative skew.

In other words, there is no epidemic of disengagement, though, admittedly, there is definitely room for improvement.

And there appears to be a reasonably strong association between work engagement frequency and planned retention (see figure below). In the very low engagement group, for example, more than 56 percent of respondents planned to stay with their employer for two years or less, with only 20 percent planning to stay for 10 years or more. This can be easily contrasted with those in the very high engagement group, where a little more than 11 percent planned to stay for two years or less and more than 56 percent planned to stay for 10 years or more.

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Other insights can be gleaned when the work engagement results from 2017 are compared to those from the 2014 Work and Well-Being Survey.

  • High engagement frequency (the percentage of high or very high) is up by about 8 percent (31 percent in 2017 vs. 23.2 percent in 2014).
  • Low engagement frequency (the percentage of low and very low) is down by about 4 percent (21 percent in 2017 vs. 25.2 percent in 2014).
  • Average engagement frequency is down by about 5 percent (47 percent in 2017 vs. 51.6 percent in 2014).

These results point to a slight uptick in work engagement (the mean in 2014 was 3.62 compared to 3.83 in 2017), but in general indicate that work engagement has shown a fair amount of consistency across the two time points.

Therefore, regardless of what the alarmists might scream from the mountaintops, there is not a disengagement epidemic. However, managers and senior leaders should recognize that there is room for improvement when it comes to the frequency with which employees experience work engagement.

In both 2014 and 2017, work engagement and organizational trust were highly predictive of employee well-being (accounting for more than 50 percent of the variance in each survey). How workers perceive various types of psychologically healthy workplace practices demonstrate fairly strong correlations with both work engagement and trust.

  • Employee perceptions of involvement, growth and development, and health and safety were most predictive of work engagement.
  • Employee perceptions of involvement, recognition and communication were most predictive of trust.
  • These same variables were identified in both the 2014 and 2017 surveys, accounting for about 28 percent of the variance in work engagement and 40-50 percent of the variance in trust.
As such, organizations may want to allocate effort and resources toward shoring up various psychologically healthy workplace practices, as these efforts may produce benefits for trust, engagement and even overall retention.
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Hardly a week goes by without some headline discussing the dire state of engagement. Typically, these headlines are propagated using data from a consulting firm, whose data indicate that scores of people are disengaged or, at the very least, unengaged.

However, APA’s national poll in 2014 using a scientifically validated measure of work engagement (as opposed to a consulting firm’s made up definition of engagement) showed that in the general population work engagement manifests as a close approximation of the bell curve, just with a slight negative skew (i.e., more people fall into the higher engagement categories that the lower engagement categories). While those results are now a bit dated (after all, that was more than two years ago), I would suspect that a more updated poll would show much the same thing.

This issue surrounding many of the engagement headlines is a big reason why I was pleasantly surprised to read a piece written by Rodd Wagner last month in Forbes. He echoes the rallying cry against this engagement alarmism (or the Chicken Littles as he refers to them). When considered within the context of other data I have discussed on this blog, along with some of the scholarly research that has been published, here are few of the key pragmatic, non-alarmist and rational takeaways about the state of engagement in the workplace.

  • There is a difference between work engagement (a scientifically validated construct) and employee engagement (a consulting firm’s hodgepodge of satisfaction and commitment items).
  • Work engagement is about the employee working experience and its pleasantness/unpleasantness. Employee engagement is about how the company can convince employees to work harder and longer (i.e., “discretionary effort”).
  • Work engagement exists as a normal distribution, with a somewhat higher percentage of employees in the high engagement group than in the low engagement group. However, the vast majority of people will report average levels of engagement.
  • Employees do not have to be in the high engagement category to be high performers, and in fact, there is some evidence that higher performers are not always the most engaged.
  • In terms of a psychologically healthy workplace, work engagement is most associated with employee involvement, growth and development, and health and safety practices.

There is room for improvement when it comes to the way organizations approach work engagement, but most employees will not be enticed by cheap gimmicks (Don’t tell some of the tech companies that rely on said gimmicks to keep employees at the office for longer hours). If organizations want to actually enhance work engagement, they will need put forth their own discretionary effort to address issues in the corporate culture, in the way work is designed and in more adaptive and flexible work environments.

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This page is a archive of recent entries in the Engagement category.

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