Leadership

The Truth About Employee Engagement

Forget perks. Motivating staff and boosting productivity have nothing to do with foosball tables and massages

Written by Deborah Aarts

There’s an ice-cream trolley in the downtown Toronto headquarters of digital marketing agency Klick Health. There also is a yoga studio, a slick Starbucks machine, a lounge with leather couches and a huge Lego wall filled with designs of employees’ making. All the space needs is a foosball table to hit pretty much every cliché of the New Economy, “people first” workplace.

But none of the perks seem all that popular with employees. In fact, at 2 p.m. on a Wednesday afternoon, hardly anyone is using them—they’re too busy working. Employees type fervently, shout ideas back and forth and cheerfully dispatch client updates as they pass one another in the hall. There’s not a vacant-eyed Facebook surfer to be seen on the three (soon to be four) floors the company occupies. This is how CEO and co-founder Leerom Segal knows things are going well. “You can feel the energy as you walk by. You can feel the creativity, the pride,” he says. “That’s my leading indicator.”

It’s obvious even to someone with unbiased eyes that Klick staff love to work here, which is a big reason why the company earned the No. 30 spot on the 2014 list of the 50 Best Small and Medium Employers in Canada (BSME). Compiled annually by the Queen’s School of Business Centre for Business Venturing and Aon Hewitt, the ranking identifies an elite group of entrepreneurial organizations from coast to coast that demonstrate very high levels of employee engagement.

Now “employee engagement” is a phrase we’ve been hearing a lot lately. It looks good in an annual report or etched on the mission statement in the lobby. Its ubiquity, coupled with its somewhat hippy-dippy vibe, tends to make some managers roll their eyes: “Yes, yes, we have weekly on-site massages, so we’re good.”

More Advice from the Best Employers: 6 Employee Engagement Mistakes

But to dismiss engagement as another trendy buzzword is to miss out on a massive opportunity. Contrary to popular misconception, engagement is not about making employees happy. It’s about making them productivity powerhouses. Engaged employees are excited to work for you. They want to stick around. They strive to excel, even at the most menial of tasks. In short, they’re the type of people who propel a company to greatness. Studies show that engaged employees crank up innovation and output, and deliver shareholder returns five times higher than organizations with dispirited staff.

But you can’t buy this kind of productivity with Barbecue Fridays. “A lot of managers use perks to try to foster engagement, because perks are visible and tangible,” explains Einar Westerlund, who heads the BSME program as director of project development for the Queen’s Centre for Business Venturing. “They’re easier to understand than the underlying concept of engagement, which is a very deep-rooted commitment to performance.”

This misunderstanding leads many companies to spring for fringe benefits that do little or nothing for productivity—essentially, wasting their money. “Perks can be there as embellishments,” says Westerlund. “But by themselves, they don’t work.”

Read: How Engaged Is Your Staff? 6 Steps to Finding out

Instead, true engagement comes when you get to know your employees—their abilities, their ambitions and their preferences—and, whenever possible, put staff to work on tasks that tap into those skills and motivations. This takes effort. But this effort can deliver more benefit to your company than any other initiative, HR or otherwise. “There’s nowhere in your organization you can add more profitability and productivity than by simply turning on your existing team,” argues Eddie LeMoine, a speaker and author specializing in employee engagement who splits his time between Calgary and Halifax.

Klick and its peers in the BSME class of 2014 are proof of this. Emulate what they do and you will supercharge your own staff—no pinball machine needed.

Agency vs. arcade games

Reg Robinson and Jim Ostertag care a lot about workplace culture. In fact, the pair launched Solvera Solutions (No. 17 on the BSME list), their Regina-based IT services firm, in 2005 with a goal of deploying only practices that really engage employees—things the pair knew to be effective from their work at other organizations. Top on their list was to give every staffer a say, so that everyone on the payroll felt committed to and involved in the success of the company. “We wanted to start on the right foot,” explains Robinson.

Read: Helping Employees Act Like Owners

It’s a smart approach, according to Kevin Kruse, the Pennsylvania-based author of Employee Engagement 2.0. “Most companies try to improve engagement with top-down initiatives. C-level execs and HR professionals will huddle around a conference table to brainstorm ideas to drive up engagement,” he says. “But rarely are the answers found at the top.”

In the beginning, Solvera’s grassroots connection was easy to sustain: a simple matter of regular, all-hands meetings and plenty of “management by walking around.” But as the head count grew (the firm now employs the equivalent of 176 full-timers) and Solvera expanded (it has added offices in Winnipeg and Calgary), that became tricky. So, the company systematized the ways in which it solicits feedback and ideas. It holds annual focus groups with employees to make sure working conditions, processes and benefits remain in line with what people want. It also polls staffers to determine which wellness and social programs the firm will support.

In short, Solvera gives its people agency. One popular program allows all employees, regardless of rank, to make “ambassadorial” decisions on behalf of the company. Staff can spend up to $500 each on discretionary things they believe are in Solvera’s best interests—sponsoring a community organization, throwing a party to celebrate a client accomplishment or attending an event, to give a few examples. This, in turn, imparts to employees a strong sense of ownership and pride—great drivers of engagement.

“From a monetary point of view, $500 isn’t a tremendous amount of money,” explains Ostertag. That cost is far outweighed by the value of employees’ feelings of empowerment. “They view it as us trusting them to donate company funds to something that’s important to them personally. And that means a lot.”

Access vs. Aromatherapy

Like many engagement-minded leaders, Catarina Sanders got a lot out of Daniel Pink’s 2009 bestseller Drive: The Surprising Truth About What Motivates Us. Sanders, a vice-president in charge of leading the employee-engagement efforts at Vancouver online portal developer Habanero Consulting Group (No. 4 on the BSME list), is a vocal proponent of Pink’s central argument: people want to pick their own paths. So, the firm has tried to create “an environment in which people can experience autonomy, mastery and a connection to a higher purpose,” she says.

It’s that last piece that Habanero has really nailed. The company practises open-book management—no details, financials included, are hidden from employees—so everyone knows the organization’s condition and direction. A new profit-sharing program helps to reinforce the link between individual efforts and overall success. “That transparency is critical to our [high] engagement, because people understand the context and see how their efforts are benefiting the business,” explains Sanders.

Habanero also has assigned every employee a “performance coach” who helps them make sense of how the work they’re doing ties into the broader goals of the company and, in turn, conveys their concerns and comments up through the hierarchy to the appropriate people. No coach works with more than five people, which allows regular in-person contact and thus greater familiarity.

Read: Total Transparency was Part of One Company’s Overhaul

Mid-level intermediaries such as Habanero’s coaches are some of the most effective conduits of engagement, according to Kruse. Aside from simply being messengers, he says, “it is these managers who create an environment that fosters the growth, recognition and trust needed to have massively engaged teams.”

Personal growth vs. Pizza lunches

The leaders of construction company Reid’s Heritage Group (No. 49 on the BSME list) have come to value a bottom-up approach to setting company priorities by a different route. In fact, it was employee feedback—drawn from an annual employee-engagement survey—that told president Tim Blevins and his executive team that Reid’s staff wanted one thing more than anything else: personalized opportunities for professional development.

To Blevins, that meant giving each employee money to spend on training that supported their own career goals—and encouraging them to max out their allotments. It also meant renovating an old cabin on the Cambridge, Ont., company’s property into a state-of-the-art centre for team development and learning.

Read: The 30 Best Management Practices of All Time

Because these are measures that Blevins’s staff told him they want, and because he sees a perceptible lift in the quality of work when his employees have a continuous-improvement mentality, making the investment was a no-brainer. “Whatever you can offer that helps people enjoy what they do is worth doing,” he says. “There’s a real hunger for knowledge here, and it’s our job to support it.”

Programs like the ones in place at Reid’s are effective as long as they focus on customized employee development. “The biggest reason people leave companies is because management doesn’t take time to notice what their individual strengths are,” says LeMoine. And those strengths aren’t necessarily obvious, he adds. “Often, employers will say, ‘You’re good at this, so this must be your strength. But a strength isn’t just something you’re good at; it’s also something that makes you feel good to do. They’re not always one and the same.”

For instance, just because Ted in marketing is a whiz at writing ad copy doesn’t mean that’s his ambition. If you don’t ask him about his goals and then give him opportunities to pursue them, he’ll look for an employer that does—and you’ll lose both his current and his untapped skills.

“You and your managers have to have real conversations with people to understand what drives them to come to work,” advises LeMoine. “Then, you have to figure out how you can align that with what you’re trying to do as an organization.”

Tailored tools vs. Turntable decks

Back in Toronto, Klick’s Leerom Segal is convinced that a company can thrive only when its leaders understand what intrinsically motivates each employee. Indeed, he believes that Klick’s adherence to this philosophy is a key reason the firm is able to sustain double-digit annual revenue growth.

Read: The 7 Deadly Sins of Control Freak CEOs

So it’s not surprising that Segal has put a lot of thought into what fires up his people. (In fact, he’s just co-written a book about it, called The Decoded Company.) He’s not the type of leader who delegates this stuff to the HR department. (Probably for the best, since Klick doesn’t have one.) “For an entrepreneur, your people are the thing you invest in more than anything else,” he says. “If you don’t spend time thinking about your biggest investment, you’re not doing your job as a leader—and, frankly, I don’t have a tremendous amount of respect for you.”

Segal has 300-plus people on his payroll; there’s no way he and his managers could support what he dubs “the relentless pursuit of awesome” among employees without a bit of help. His answer: big data. Everything at Klick centres around Genome, proprietary software that consolidates pretty much everything the company does, from work ticketing to budgeting to training to internal social networking.

The platform—which all employees are logged into all day—allows people to track their personal performance vis-à-vis the firm’s progress, to contribute to the company’s social endeavours (a program called Klick It Forward allows every staffer who completes a project under budget to donate the difference to a charity of their choosing) and to participate in relevant training. The more time staff spend in Genome, the more personalized Genome’s interaction with them becomes. The effect is akin to what heavy users of Amazon or Netflix experience, Segal explains. In a sense, Genome is as much an empowerment tool as it is a workflow enabler. “[Big data] doesn’t need to be used just to dissect customers and market to be more effective,” explains Segal. “It can be used to understand people, too. And by better understanding people, you can curate a much better environment for them.”

This kind of technology plays right into what knowledge workers increasingly seek, says Westerlund: “Employees want more manoeuvring room in enabling productivity, and they crave smart systems and tools to work with. The best employers have been creative in the way they capture hearts and minds.”

So, if fostering intrinsic personal satisfaction and motivation is what really drives employee engagement, why even bother with the Lego wall? “That’s a perk,” Segal says with a smile. “It’s one way of saying thank you to our people. But that’s not what really matters. It’s not going to get them to mastery faster.”

METHODOLOGY

The Best Small and Medium Employers in Canada program is a partnership of the Queen’s Centre for Business Venturing and Aon Hewitt. Participating companies are ranked by their employee-engagement scores and other factors, as measured by surveys administered to employees that provide detailed feedback on 21 key engagement drivers. The program is open to companies with 50 to 399 Canadian employees.

Originally appeared on PROFITguide.com