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White Paper: Are rewards always the right tool for employee engagement?


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Are rewards always the right tool for employee engagement?

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White Paper: Are rewards always the right tool for employee engagement?

  1. 1. creat engag ing an ed wo rkforc e
  2. 2. Are rewards always the right tool to create employee engagement? A White Paper Sodexo Motivation Solutions strongly advocates the benefits of rewards as drivers for creating higher levels of employee engagement. However, we also acknowledge that for companies to achieve the greatest benefit from rewards, other employee engagement tools and business fundamentals need to be in place. This White Paper, written by Richard Parkes Cordock, looks at what some of these fundamentals are, and explores alternative ways to get the underlying basics in place so that your rewards can achieve the business goals you desire.
  3. 3. Are rewards always the right tool to create employee engagement? – A White Paper Thousands of years of The employee employee engagement engagement umbrella The link between passionate, motivated and driven Employee engagement has become an umbrella employees — and higher levels of revenue and term encompassing many areas such as internal profit growth has been understood for a long time. communications, appraisals, benefits, salary, health, wellbeing, rewards (in which Sodexo Roll the clock back thousands of years to the days Motivation Solutions specialises), personal of Confucius and you’ll hear the saying ‘Man with development, training, mentoring, coaching, sour face should not open shop’. and many more. The list goes on. The ancient Chinese clearly understood the link Just as parents intuitively know, there isn’t only between people and profit, and they knew that one way to get the best from their children — and when employees are motivated, love their work children know there isn’t only one way of getting and feel connected with the business, they deliver what they want from their parents — in business, a superior level of service for their customers. there isn’t one single answer to create an engaged Customers pick up on this ‘emotional connection’ and motivated workforce. making them more likely to repeat buy and As human beings we are complex, emotional recommend. Hence, a direct link between creatures, with our own goals, ambitions, people and profit. struggles and personal challenges. Thousands of years later the same principles stand The term ‘different strokes for different folks’ true, and the same challenge remains for business will always remain true, but it is also true that we leaders which is: ‘How do you create a workforce share a common set of behaviours, and it is these which is motivated, driven, committed and focused ‘commonalities’ which the various engagement on the needs and wants of your customers?’ tools tap into to help get the best from employees. This challenge of getting the best from a workforce is now well understood and is called employee engagement. The examination of how best to engage employees is the purpose of this white paper.
  4. 4. Employee engagement tools recognise that as employees We want to know what is going on: Internal Communications We want to know how we are doing: Appraisals We want to be well paid: Salary We want to be rewarded for our extra effort and success: Rewards and Incentives We want to learn: Training and Development We want to feel good: Wellbeing We want to feel safe: Health and Safety We want to feel motivated and happy at work: Management and Leadership We want to be part of something successful: All of these together (and more) Clearly each employee engagement tool has its own function and is an important contributing factor in creating a passionate, engaged and motivated workforce. But there is no single ‘silver bullet’ which is guaranteed to create lasting and unfaltering engagement for every employee. Companies need to understand what drives engagement, and choose the right combination of tools and management approaches which work best for them. These may be different tools and approaches at different times.
  5. 5. Are rewards always the right tool to create employee engagement? – A White Paper What employee engagement is and isn’t With so many marketing messages claiming to offer the ‘utopian’ answer to creating an engaged workforce, it is important to step back and understand what employee engagement is and isn’t. • mployee engagement is not a one off activity — E Customers know the reason why they buy from it’s something which needs working at every day. companies, but often employees on the inside do • mployee engagement is not the sole E not fully understand the customer’s ‘reason why’, responsibility of HR — it is the responsibility or cannot clearly articulate it. of everybody in the company, especially For example, customers of companies such as managers (both senior and line–managers). Apple and M&S know fully what the company • mployee engagement is not about a single E stands for and what they expect from it. solution (such as a survey or an appraisal) — Apple and M&S have spent years and hundreds it’s about using a combination of tools of millions of pounds creating brands which and management approaches wisely, to tap mean something in the minds of their customers. into the different emotional and logical drivers Customers clearly have a ‘reason why’ they shop of employees. there. Conversely, employees of those companies need to believe in the same ‘reason why’ — and if What we do know however is that underpinning there is any disparity, customers will pick up on all highly engaged companies is a common set of it and, in the long term, the brand values will fundamentals from which engagement can be built. diminish (as will revenues and profits). These fundamentals include: This ‘reason why’ must be understood and • strong vision, purpose and a clear sense A believed by everybody in the company — from the of direction. most senior executive to the most junior employee, and from the oldest serving team member to the • culture and set of values. A newest recruit. • ‘reason why’ which brings everything together. A The ‘reason why’ gives people a purpose to go to work each day and do more than they did the day before. This ‘reason why’ stops work from just being a job, and turns it into something more powerful, enjoyable and engaging. We know that in companies with high levels of employee engagement, employees feel responsible for its success — just as if it was their own business. The question is, how can you get the ‘reason why’ deep into every member of your workforce, and how can you turn it into something more powerful which best serves your customers?
  6. 6. Employee engagement Problem Co. and Growth Co. and great managers To show how managers can help get the ‘reason At the heart of all companies with high levels why’ into your workforce, and how it can help of engagement are great managers and leaders create higher levels of employee engagement, who create and communicate this ‘reason why’. let’s look at the story of two companies, These are not just great senior managers at Problem Co. and Growth Co. the top, but are great managers at every level Both Problem Co. and Growth Co. are identical of the company. except for one thing — one company is on the up, They are not just managers in title, but real the other is on the down. man–managers and leaders who get the best They both have the same number of employees, from their teams each day. and sell the same products and services into the They may not even have ‘manager’ in their title. same market. They may be team leaders or supervisors, They are identical but for an invisible and intangible but they are the key to creating engagement. factor, something which is not reflected on either Managers are essential in getting the vision, of their balance sheets. purpose, spirit, brand values and ‘reason why’ That is their people’s attitudes. down into the front line operation and helping employees ‘get it’. Only when employees (both those who are customer facing and non–customer facing) ‘get it’ and ‘show it’, will customers see that as a company you really believe in the products and services you offer. When customers see you believe, you have a much stronger chance that they will repeat buy from you and recommend you to their friends, family and business associates.
  7. 7. Are rewards always the right tool to create employee engagement? – A White Paper Let’s look at each company in turn Problem Co. Growth Co. The senior management of Problem Co. know Contrast that with Growth Co. and remember they have a problem. that Growth Co. is identical in every way to They know that the general morale and motivation Problem Co. except for one invisible factor — of their workforce is low. They do have some high its people’s attitudes. performers who are ‘fully engaged’ but at least Growth Co. is going places. Its employees are 70% of their workforce are either not-engaged or, motivated, driven and emotionally connected to worse still, actively disengaged. the business. They feel part of something, which In Problem Co. there is a lack of ownership and is exciting, has a buzz about it, and is fun. They responsibility, and an attitude of complacency is understand the ‘reason why’. starting to creep in. Customers love dealing with Growth Co. This is beginning to have a massive impact on and make Growth Co. their supplier of choice. the performance of the team. Productivity is low, Customers know that Growth Co. provides team spirit is low and there is resistance to excellent products and services. change. Key employees are starting to leave, with They love the creativity, innovation, and strong the low performers remaining. sense of passion and belief which pours out of There’s a lack of pride amongst employees all of Growth Co.’s employees. and the negative energy and in–fighting in the For Growth Co., the link between engaged Problem Co. is palpable. employees and engaged customers is tangible, This is naturally starting to have an impact on and can clearly be seen in their P&L account customers who are receiving, at worst, a below and Balance Sheet. par experience, and at best an inconsistent one. Two extremes with a common link: Customers pick up on the indifferent customer Whilst these are two extremes, there is a service, the lack of innovation, and they start common link at the heart of both companies. to vote with their feet. The two companies’ respective failures and Before long, Problem Co. is seeing a drop off successes are not an accident. in new customers, repeat customers and referrals. The common link at the heart of both Problem They are seeing both revenues and profits drop. Co. and Growth Co. is an environment which This vicious downward spiral continues, as management has created. engagement gets even lower when Problem Co. The success of Growth Co. is down to has to start cutting costs and making management’s ability to get the ‘reason why’ redundancies. understood and believed by each member of the workforce. Conversely, although it may appear that Problem Co. have a motivation, engagement and retention problem, the reality is that management haven’t yet successfully created an environment where employees can thrive.
  8. 8. Three important observations on employee engagement 1 3 Your company may not be Your employees can quickly as polarised as Problem Co. switch between engaged or Growth Co. and disengaged In Problem Co. and Growth Co. we looked at two In the world of employee engagement, it is widely extremes. One company which has been brought accepted that there are three types of employees. to its knees through poor morale, and another Research by Gallup suggests that these are: company going places because of positive morale • ngaged (29%) – These are people who E and engagement. ‘believe in’ and are driven and connected to Most likely your company is somewhere between the business. They are key employees who the two, and you are either looking for ways to will take your business forward. increase motivation and engagement or looking • ctively disengaged (17%) – These are people A for ways to use engagement as a way of taking your who ‘do not believe’ in your company, or are business to the next level. Either way, the principles the wrong people in the wrong places. They are outlined in this White Paper will work regardless actually damaging your company, and undoing of where you are in that development cycle. the good work of the 29% who are engaged. 2 • ot–engaged (54%) – These are middlemen N You may only have a and women who neither over nor under perform. problem/opportunity They do a good job, but often good is not good enough in the eyes of your customers who want in one particular section excellence. The real opportunity for a business of your business is to work on the middle 54% and take them It’s also possible that you are a large company, to a higher level, whilst finding ways to better and within it have a department, division or business manage the 17% who are disengaged. unit which is like Growth Co. or Problem Co. (or somewhere in between). Again, it is realistic to That said, it is important to recognise that an expect that Growth Co. or Problem Co. may not employee who was previously engaged can reflect your entire organisation, but just part of it. quickly become disengaged, for reasons such The principles outlined in this report work for as the influence a line manager has on them, parts of companies as well as entire companies. or a change in circumstance at work, or even at home. Their change in attitude and level of engagement can have a negative impact on their colleagues and team morale, and effect the engagement of the rest of the workforce. It is important to recognise that employee engagement is not just a tick in a box or a one off activity. It is something which needs to be carefully managed, understood and worked on every day – not solely by HR, but by every person of authority and responsibility in a company.
  9. 9. Are rewards always the right tool to create employee engagement? – A White Paper The importance of line managers Line managers are the critical link in any Managers as mentors organisation between senior management and front It would therefore appear logical that management line employees. They are key to getting the ‘reason training is a key tool in the employee engagement why’ into the front line and keeping it alive there. story, and to some degree it is. Line managers are the first–line point of contact Having good managers and specifically man– for employees, and often the face of authority. managers is an essential backbone for achieving They can make an employee’s life bliss, or they high levels of employee engagement. can make it hell. Without good managers in place (especially at A good line manager can drive a company forward line manager level) who create an environment to unprecedented levels; a bad one can kill morale where employees can flourish, many of the other just by walking into a room. employee engagement tools such as rewards will All too often, line managers are managers only in not have the full effect they are capable of having. title, and even though they have responsibility for But giving more management training is not the performing annual appraisals, they struggle to get complete answer. the best from their teams. Many managers have been on management training Frequently this is simply a case of managers not programmes yet are still not getting the best from having the right tools or training to get the best their teams. What we have found is that there is from the people they lead. a step further which managers can take, to really create engagement in their teams and make sure the ‘reason why’ is understood and believed. This step is to enable managers to become mentors to their teams, taking them on a journey of personal, professional and business development so that employees fully understand the company, the customer and this critical ‘reason why’.
  10. 10. Enterprise mentoring Whilst mentoring is widely accepted as a Enterprise mentoring gives line managers the preferred development approach for senior tools to get the very best from their teams, executives, (where an outside coach or mentor and helps to create an emotional bond between comes into a company, and helps the leader an employee and their company, managers, develop), this is clearly expensive, and for that customers, and colleagues. reason, typically only happens at Board level. Through a combination of digital mentoring Mentoring is often overlooked for the rest of the sessions and face–to–face mentoring, managers company but, by using the right tools and approach, (mentors) and employees (mentees) get to learn line managers can create highly engaged and some of the best–of–the best thinking from passionate teams. recognised business leaders and entrepreneurs One specific approach which we have found to in subjects such as customers, teams and work and is used to get the ‘reason why’ into the personal leadership. workforce is ‘enterprise mentoring’. Outcomes from enterprise mentoring activity: Enterprise mentoring gives line managers the – Engaged, passionate and motivated workforce tools and a proven approach to bring the values, – Lower staff turnover vision, purpose and ‘reason why’ right down into the front line — and create alignment between what – Happier repeat and referral customers is happening in the Boardroom and the employees – More innovative and creative workforce who deal with customers on a daily basis. – Higher revenue and profit growth Summary Salary increases, incentives and rewards can Sodexo recognises the important role line play a massive part in the motivation and managers play in creating this alignment, and engagement of a workforce, especially if done recommends that companies who are looking correctly and with careful thought. to improve engagement revisit the work done by their line managers, and consider helping But rewards need to be part of a wider and them become mentors to their teams. balanced approach to employee engagement. One approach you may want to look at to help Before companies move forward with rewards, create this alignment is an Enterprise Mentoring Sodexo recommends they revisit their vision, values programme. This is where you give your line and culture, and make sure they have alignment managers the tools to become mentors to their between what is happening at Board/CEO level teams, and you give your line managers the tools and what is happening on the front line. to get the ‘reason why’ deeply ingrained into the If an employee does not buy into the vision, entire workforce. values and purpose of the company, or they feel When alignment is in place, the impact that emotionally disconnected, then there are larger rewards will have on your business will be much problems at bay and rewards will not be the first stronger and deliver greater results for you. employee engagement tool of choice to change this. It was the Beatles who famously said, ‘Money Can’t Buy Me Love’. There is some parallel to this in business.
  11. 11. Are rewards always the right tool to create employee engagement? – A White Paper About the author of this White Paper Richard Parkes Cordock is the founder of Enterprise Richard is the author of five business books: Leaders Worldwide. Business Upgrade, and Millionaire Upgrade, both Using the principles of Neuro Linguistic Programming were published by Capstone Wiley and both were (NLP), the science of success, Richard met face–to– former WH Smith Business Books of the Month. face with over 50 UK award–winning business leaders More recently, he has written Profit Upgrade, to decode their leadership styles. People Upgrade and All Employees are Marketers. Through these digitally recorded interviews, Richard Richard speaks to companies about employee created the highly acclaimed mentoring programme engagement, leadership, creating an enterprising/ – Millionaire MBA™ which is used by over 23,000 entrepreneurial culture, how to grow your business entrepreneurs around the world. through your people – and how to keep your He later used the same teaching principles to customer at the forefront of your business. develop Enterprise MentorTM (EM), which allows companies to engage with their employees, by taking mentoring out of the boardroom and into their workforce (at an affordable price). For more information about enterprise mentoring as an approach to creating alignment, please visit About Sodexo • odexo is the world’s largest integrated facilities management S services organisation and leading global issuer of service vouchers and cards • n the UK Sodexo provides innovative food and management I services to businesses and industry, including the education, healthcare, leisure and defence sectors • odexo is one of the world’s largest suppliers of incentives S and rewards • he Sodexo Group at a glance: T – 380,000 people – 31,200 sites – Operating in 80 countries – Revenue of €14.7 billion • odexo Motivation Solutions S – €12.1 billon in issue volume – €711 million in consolidated revenues
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