Measuring staff happiness

Happy%20staffAccurately assessing employee engagement levels can be a complex task, says Nick Golding

Employers that invest time and money on benefits for staff will inevitably expect to reap the rewards, particularly in areas such as increased employee engagement.

Towers Perrin’s Global workforce study 2005 identified pay and benefits as the fifth most influential tool at employers’ disposal when it comes to engaging staff. When the survey was carried out in 2003, however, pay and benefits didn’t feature in the top-ten most influential tools at all, which shows just how much perks have risen in value for staff.

Most employers will agree that engaged employees are invaluable to their organisation. Put simply, these staff not only fulfil their contractual duties, but are prepared to go above and beyond these for their employer.

Some of the benefits programmes thought to help engage employees include flexible working arrangements and flexible benefits schemes, as trusting staff with a certain degree of choice is believed to contribute to raised engagement levels.

Yet, as with all benefits schemes, employers need to be sure that they are getting a return on their investment, and there are now a number of different ways for organisations to measure employee engagement as well as the impact of benefits on this.

One option for employers is to use generic external measurement indices to survey staff about the benefits they receive and what they gain from using them. Dilys Robinson, principal research fellow at the Institute for Employment Studies (IES), explains: “Broadly speaking, all the organisations that I have come across measure employee engagement via attitude surveys.”

The Gallup Q12 is a popular survey, that has been designed to measure employee engagement. This focuses on factors such as how employees feel about their employer and whether programmes are in place to recognise their efforts.

Employers who use such surveys believe these can be used to assess levels of engagement accurately at any time. Julian Bazley, incentives specialist at Maritz, says: “There are different indices that can be used, but those who use them believe that, at any one time, they can put a stake in the ground and find out how engaged their staff actually are.”

Generic surveys such as the Gallup Q12 are also popular because they enable employers to benchmark against others operating within their sector, adds Robinson.

“Gallup Q12 is now seen as a benchmark by many, so it can be used by companies to compare their levels of engagement to other companies,” she says.

Other employers, who may be less concerned with establishing how their organisation sits against competitors or the industry norms, have devised their own measurement devices to assess the relationship between the benefits they offer and employee engagement.

At the very crude end of the scale, some resort to offering benefits that have the potential to engage staff and then assume that engagement levels are a direct reflection of take-up rates. For example, if 90% of staff take up a perk, then 90% must be engaged.

Yet, others are taking a far more strategic approach by targeting areas of concern within their organisation, that could be resolved by improving engagement.

Employers that have concerns about staff absence levels, for example, may introduce a benefit designed to counter the problem. By measuring absence levels before this is introduced, and working on the assumption that engaged employees will not be prone to taking unnecessary sick days, the organisation can measure absence again, say, 12 months later to see what effect, if any, the benefit has had.

Jonathan Haskell, chief executive officer at Michael C Fina, explains: “If you reward staff for turning up to work, measure absence rates at the start of the programme and then [again] after 12 months. This should give you a reading of how engaged your staff are.”

Working on the same principle, other employers have pinpointed high labour turnover as a problem, so have put benefits in place that they believe will encourage greater loyalty and commitment from staff. Employee share schemes are just one example of such a perk as these allow staff to buy into a business and feel as though they are sharing in its success. Once again, measuring turnover rates before and after the benefits launch can provide an idea of how engaged staff are by the perk.

Jim Crawley, principal, performance and reward management at Towers Perrin, says that engaged staff are more likely to remain with an organisation. “There is more loyalty among engaged staff.”

Some employers, however, may be dubious about the accuracy of linking turnover to engagement, as peaks or troughs in turnover can be attributed to a number of factors.

Samantha Gee, head of reward at KPMG, says: “You have to be very careful with this because turnover will change anyway depending on the market, so to attribute a change in turnover just to specific benefits and levels of engagement is a bit of a risk.”

Customer satisfaction surveys are another key tool employers can use to measure the effect of benefits schemes on engagement. Engaged employees are far more likely to ‘go the extra mile’ when it comes to interacting with customers, and incentive schemes can help encourage this commitment.

“If a company is about increasing the [quality of] customer facing [roles], employees may benefit from some sort of recognition programme. If staff satisfaction surveys improve, this is a tangible way of recognising whether [a benefit] programme has worked. It is a key indicator of whether employees are engaged or not,” explains Bazley.

One company that has gone down this route is the RAC, which incentivises its field-based mechanics to encourage members of the public to purchase roadside cover.

Before the incentive scheme was launched in 2005 only employees who were truly engaged with the company went beyond the call of duty to sign up new members to RAC.

However, under the new incentive programme, each time an employee signs up a new customer, they are presented with a financial reward. The RAC then uses the number of new members purchasing cover as a measurement of staff engagement levels.

“There is a direct link between an engaged employee and an employee that works as an ambassador for a company, because engaged [staff] are proud to work for that organisation,” says Bazley.

How to measure employee engagement

Staff turnover
Measuring the effect of benefits on staff turnover is one method of assessing whether the perks help to engage staff. Engaged employees should be happy to work for a company, rather than looking to leave after a short period of time. If turnover drops by a certain percentage after a scheme is launched, for example, it may not be inconceivable to link this to an increase in employee engagement.

Customer satisfaction levels
Staff who see themselves as an ambassador of an organisation and speak highly of their employer are likely to be engaged. If employees go beyond the call of duty, this can be measured on a satisfaction survey. A recognition scheme could be all it takes to encourage staff to improve their attitude to customer service.

Staff surveys
Internal or external surveys can be used to identify what staff think about their employer and the benefits they are offered. These can also be used to identify if employees display the traits commonly associated with engagement such as commitment and loyalty to their employer.

Absence levels
Engaged staff are far less likely to take unauthorised absence from work, so looking at absence levels can be a good indication of whether staff are engaged.

Case study – KPMG survey engagement

Accountancy firm KPMG uses two annual internal employee surveys to assess staff engagement levels and the effect benefits have on this.

One survey analyses engagement levels, while the other focuses on benefits. In the future, the firm plans to combine the two to gain a better idea of the relationship between benefits and engagement.

Samantha Gee, head of reward at KPMG, explains: “We have questions that centre around engagement in our annual employee survey and we compare these year-on-year to locate movement [in engagement levels]. What we haven’t done yet is to link the two [surveys] together.” Although KPMG relies on pay and benefits to encourage engagement among staff, these are just part of the equation. KPMG also uses its entry to the Sunday Times’ Top 100 companies to work for to benchmark its engagement levels against other employers. “They always ask about engagement and it is useful to get an external benchmark,” adds Gee.