From satisfaction … to engaged

It's one thing for employees to be satisfied with their jobs. But it's better for companies such as Boeing, its customers and its stakeholders if employees are fully engaged. Here's a look at how Boeing defines employee engagement.

BY RUTH SAVOLAINE

It's intuitive. Employees who are well-informed, involved in decisions that affect their jobs, and are passionate about their work are more than just "satisfied." They are also more productive, and their ideas and energy help companies achieve stronger financial and operating performance.

Today, that intuition's been quantified. Human resources professionals have clearly established a link between highly engaged employees and profitability. In one study, Hewitt Associates, a global human resources consultancy, found that companies in which at least 60 percent of their workforce was engaged showed an impressive average total shareholder return of 20.2 percent between 1999 and 2003. This was significantly higher than the average results generated from companies with a less-engaged workforce.

"The evidence that improving employee engagement drives improved business results has become overwhelming," said Ray Baumruk, Global Employee Research Practice leader at Hewitt.

Other international studies also show the impact of employee engagement on performance.

According to a 2004 study of 41 global companies by Chicago-based organizational research and consulting firm International Survey Research, companies with highly engaged employees surpassed those with less engaged employees in both operating margin and net profit margin over a three-year period. Research shows additional benefits of improving employee engagement include

• Improved customer satisfaction.
• Reduced absenteeism and turnover.
• Improved quality and safety.
• Product innovation.

"The business case is clear," said John Messman, Employee Relations director at Boeing. "Engagement is not about the latest trendy management book. Companies have been looking at ways to improve employee satisfaction for many years. Now we have more rigor in the way we measure employee engagement so that we can be more effective in making improvements that lead to tangible results, both for the company and for employees. Employee satisfaction, then, becomes an outcome of engagement."

Defining engagement

What is employee engagement? Boeing's definition of employee engagement is an individual's personal attachment to his or her work on both an intellectual and emotional level. In other words, it relates to what employees think and feel about their job, their leaders and the work environment. That environment can include physical facilities, work-based benefits, pride in the company's products and services, and life/community-related programs. As shown in the diagram below, the power of an employee's emotional engagement with the company is significant.

One way to measure employee engagement is to look at three primary behaviors:

• "Say"—The employee consistently speaks positively about the organization to coworkers and refers potential employees and customers.
• "Stay"—The employee has an intense desire to be a member of the organization, despite opportunities to work elsewhere.
• "Strive"—The employee exerts extra effort and exhibits behaviors that contribute to business success.

Engagement versus Involvement?

For some time, Boeing has had formalized Employee Involvement (EI) programs, including High Performing Work Organizations. So what's the difference between "Employee Involvement" and "Employee Engagement" at Boeing?

The answer is they are interrelated. Engagement is about individuals. Involvement is about teams. "You can't have high-performing teams without high-performing and engaged individuals on those teams," Messman explained.

The EI focals and Employee Relations specialists are working together to optimize the company's engagement strategies.

"Employee Involvement is a catalyst for organizational change," said Edward Schaniel, director, Employee Involvement at Boeing. "EI provides a competitive edge by encouraging innovation, and the creativity of each employee is collectively enhanced. Engaged teammates surpass production expectations and are able to come up with valuable process improvements." For example, Boeing's Anaheim, Calif., site has both Employee Engagement and EI programs, which include nonunion and union-represented employees.

Engagement's links to Lean

Employee Engagement further supports Boeing's efforts in implementing Lean processes.

"Simply copying Toyota's lean tools and techniques won't make your company lean," said Bob Martin, with Integrated Defense Systems' Lean Enterprise Office in Long Beach, Calif. "Successful Lean implementation requires a culture of engaged and empowered individuals who use the scientific method to design, experiment, and continually improve their work. Although Lean must be supported by leadership to be effective, everyone has to engage in it."

The company's Lean initiatives are directly related to "Work" as a driver of engagement (see diagram below). "An emphasis on job design helps ensure that people are doing the right job, and doing it right," said Lee Whittington, with IDS' Long Beach Lean Enterprise Office. "People, not just processes, create Lean value."

Which comes first?

Striving to be recognized on one of the "top 100" lists of good places to work requires integrating engagement and performance. "Both the research and case studies show us that improving engagement comes before significant jumps in operational and financial performance," said Ed Gubman, founding partner of Strategic Talent Solutions, a Northfield, Ill.–based business leadership consultancy. "The key is to develop a culture of engagement, starting with the immediate managers, so that employees are intellectually challenged and emotionally inspired to work. This includes taking extra steps to engage virtual employees who don't have the communal work environment that other employees have."

ruth.savolaine@boeing.com