More Thoughts on Employee Engagement

Posted on November 11, 2009

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Earlier this week, two people I follow on Twitter (Jennifer Benz and Dr. David Ballard) posted a link to an article about a survey conducted by WorldatWork and Watson Wyatt that found that employee engagement levels over the past year “fell nearly 10% overall and 23% for top performers among 1,300 full-time workers at 235 large U.S. employers.” According to the article, the key to increasing levels of engagement is to “rethink” benefit and compensation strategies.

A different point of view arrived in my inbox last week, in the form of a “Conversation Starter” from McKinsey. Thering brief essay, entitled “Motivating People: Getting Beyond Money,” also focuses on engaging and inspiring employees, but takes a different approach:

Numerous studies have concluded that for people with satisfactory salaries, some nonfinancial motivators are more effective than extra cash in building long-term employee engagement in most sectors, job functions, and business contexts. Many financial rewards mainly generate short-term boosts of energy, which can have damaging unintended consequences.

So, is it all about the money (or the total compensation), or is it about the intangibles?

unemploymentWhichever side one may be on, there’s a question that everyone who is concerned with employee engagement needs to think about – how does 10% unemployment (which, according to at least one economist, might increase to as much as 13%) affect the type of – or even the existence of – employee engagement initiatives? This is an important question to consider, especially for HR/benefits pros who think that the need for employee engagement initiatives is self-evident. With double-digit unemployment, employee engagement advocates need to build strong business cases for increased investment since many executives can point to the numbers and say “hey, people should be happy just to have a job!”