Wednesday, 20 November 2013

What Impact Does Engagement Have?

Posted by My Own Coach Ltd on 10:00 with No comments
What's the difference between an employee engagement score of 80% and one of 87%?

On the surface of it, this seems a daft question. One simple answer would be "seven percentile points", but that would be a little flippant! 

Most will recognise that a score of 87% is better than 80%, but by how much and how is this quantified?

As HR director for a global business, a client of mine was setting her sights on moving employee engagement to an ambitious 87%. I was curious to find out why 87% had been chosen.

The answer I received was more about benchmarking with other similar businesses and very little to do with the impact 87% would have on business results.

So, how come engagement scores have become so important for organisations without truly understanding the impact on performance? Is it another fad, a box to be ticked, or simply to draw comfort from the comparison with others?

On one level, I am okay with this. After all, the comparison against previous engagement scores and benchmarking with industry levels makes sense and is good practice. However, I would be a bigger fan if organisations really understood the difference between 86%, 87% and 88%.

It reminds me of the time I was responsible for customer service for a well known UK retailer. We were having a debate on customer satisfaction scores and aiming to raise them. What we couldn't establish was the outcome we would achieve by raising a score of 4.1 to 4.5, on a simple 1 to 5 scale.

To attempt to answer this, I engaged a marketing company to establish the link between satisfaction scores with future customer buying behaviour. The results were very interesting, as we found there was very little difference between the scores of 4.3 and 4.7. Beyond that, there was very little impact on propensity to buy - in other words, customers would not necessarily purchase more with a score of 5.0 as opposed to 4.7!

These insights led us to establish our target with a clearer understanding of the impact it may have on business performance.

It also made us realise that we had confused the measure with the aim, focussing our attention on the wrong thing.

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