How to drive employee engagement

One of the most commonly discussed topics, and a real priority for many organisations right now, is how to engage and motivate their teams, and retain top talent. In this article we delve into the research and uncover the most effective ways to drive employee engagement.

Looking back at 2019 across all of the conferences we attended, the books we read, and the podcasts we listened to one of the most popular topics was on how to motivate teams to drive transformation and employee engagement.

Intrinsic and extrinsic rewards

Daniel Pink’s ideas around “Autonomy, Mastery, and Purpose” from his book Drive kept cropping up. He suggests that contrary to popular belief, extrinsic rewards do not effectively motivate your team. These are physical and visible rewards such as bonuses or gifts (typically going hand-in-hand with the old carrot-and-stick approach). Instead, he suggests that in order to inspire your team and encourage innovation, engagement, and ultimately increase productivity, you need to look to intrinsic rewards to make a real impact. These are rewards that are personally satisfying to the individual, which we’ll explore below.

Autonomy

What is it? Empowering your employees to make their own decisions and prioritise their workloads, based on the strategy and direction of the organisation, which should be clearly communicated to them. When employees understand the context of why they are working on a particular task, and how this aligns to the overall strategy, they should be given the freedom to plan their work accordingly and come up with their own ideas of how to solve problems.

This has a huge impact on creativity, innovation, and job satisfaction. In particular, autonomous teams that can collaborate to find a solution or test a new theory, tend to make a real positive impact on an organisation. Using their understanding of the ‘why’, and their knowledge of the subject matter that they are experts in, to uncover solutions senior management may never have considered independently.

A study conducted at Cornell University looked at 320 small businesses, half of which used a traditional Command and Control management style, and the other half gave their employees autonomy. The autonomous companies grew four times faster, AND they experienced one-third less staff turnover.

Even as early as 1980, psychologists Richard Hackman and Greg Oldham studied employee engagement and developed The Job Characteristics Model following a study of 658 employees – which is still widely used today:

Figure 1: Job Characteristics Model

Autonomy is crucial for real change to happen within an organisation, from all levels, not just within senior management teams. It’s crucial to retain top talent, foster a creative and innovative culture, and enhance productivity and growth. However, employees must be protected with psychological safety, where they feel safe to take risks and be vulnerable, and failing is acceptable in order to learn and adapt.

Mastery

What is it? An understanding employees’ strengths and weaknesses, and providing opportunities for them to harness their skills while adopting a ‘growth mindset’. Mastery is another intrinsic motivator as most people relish the opportunity to get better at what they do and become experts in their field.

Pink discusses what he calls ‘Goldilocks tasks’; the ideal middle ground for your employees where they are not tasked with projects that they are unequipped for (which could be overwhelming and frustrating), nor are they too easy (which could be boring and demotivating). The middle ground is where they can challenge themselves and develop their skills and experience through learning and practice.

Pink discusses in an interview with Harvard Business Review the two key discoveries from his research into mastery:

1. Feedback – not just feedback from your boss on personal development and progress, but feedback from your learnings. This means reviewing what you have worked on over the last sprint or quarter, how it has impacted the outcomes you are trying to achieve, which initiatives should be paused vs which could do with further investigation/resources/budget, and what you could do better next time. The feedback should come from all members of the team, in a safe environment for open and frank discussions, and should be for the purpose of improving on your next sprint or quarter to help you get closer to achieving your end goal. Regular feedback loops for teams are so crucial – they provide the opportunity to learn from past mistakes, identify successful initiatives, and be agile enough to make swift changes as and when required.
2. Habit formation – most people tend to change habits over a longer period of time, so when you are given the resources to grow and enhance your skills, you won’t see immediate change and become an expert the next day. Over time you will see the results of your development and new habits that you have naturally acquired as your knowledge grows.

Purpose

What is it? Aligning your teams to the company strategy so that they understand the bigger picture, why they are doing what they are doing, and working towards something bigger than themselves.

Pink argues that this is the biggest motivator with the biggest impact on productivity, job satisfaction, and engagement. It’s what gets you up in the mornings, motivated at work, and inspired to do better.

A study by Imperative found that 58% of companies with a clearly articulated and understood purpose experienced 10% more growth than those without one. It also found that 73% of purpose-oriented people are satisfied with their jobs. These results were consistent globally.

Deloitte conducted a study on employee engagement and found that “mission-driven” companies have 30% higher levels of innovation and 40% higher levels of employee retention, while also being first or second in their market segment.

To truly establish purpose in their company culture, businesses should change their focus from output (the endless tasks that need to be completed, with no measurement on how they impact the business) over to outcomes (success looks like an increase of X, so let’s work on Y tasks to see if they help us meet that target). Employees can then understand not only the outcomes that they are trying to achieve for their own teams, but the outcomes for the company as a whole and how they are contributing towards it.

The era of intrinsic rewards is already here

There is countless literature to support that extrinsic rewards are outdated and don’t work in the modern world. If we look to the most successful global organisations we can see that most, if not all, have already implemented these policies and are reaping the benefits. Many of these organisations, including Google, Amazon, Netflix, Deloitte, Spotify, and many, many more, use OKRs (Objectives and Key Results) to implement this framework.

Whichever methodology you choose, remember that this is a long-term and ongoing transformation that will not be achieved overnight, but will drive real growth, innovation, and employee engagement when done properly.

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