When companies invest in Employee Experience (EX) frameworks, they expect a return on investment through a higher Employee Engagement level, which in turn is expected to improve the organization’s performance. Additionally, there are appealing side-effects: Organizational well-being increases, employee loyalty improves, customer satisfaction increases, and overall, the company becomes a better organization to work for.
The origins of EX can be difficult to trace, but Gallup’s research in 2012 that showed the relationship between Employee Engagement and organizational performance, is probably one initiator of the EX hype. This report has unfortunately since been misinterpreted and misquoted, leading to exaggerated claims such as “Employee Engagement drives 22% of a company’s profitability”. Whereas in fact, the report merely states that “Work units in the top quartile in Employee Engagement outperform bottom-quartile units by 22% in profitability”. It is important to be aware of these nuances because it potentially inflates the expectations of what companies can achieve with their EX initiatives.
Today there is a broad consensus, that Employee Engagement is a significant driver of desirable organizational outcomes. EX is one way of creating the environment, structures, attitudes, and behaviors that support employees’ sense of belonging, commitment, and engagement.
But something is missing.
The challenges for the EX approach
When companies design their EX they often use a 7 phased Employee Lifecycle model and they create a long list of “Moments-that-Matter”. While this provides a neat and easy-to-manage structure, it is complicated by two challenges:
- Often employee lifecycle frameworks are too crude, and only insufficiently adapted to describe and capture employee’s true experiences. As a consequence, it feels disconnected and generates little real value for employees.
- “Moments-that-matter” frameworks are supposed to capture the moments that generate emotions, but in many companies, the employee’s experiences of their leader and their behaviors are excluded, although these are the most important moments that an employee experience.
Too often, both EX and Engagement initiatives are designed with the purpose of creating transparency for HR, but ignore what should be the real objective: To create a better place to work, where employees thrive. The wish for transparency as a way to enable the organization to do the right thing is applaudable, but if the most important factor is not measured, the usability and effect will be limited.
What most EX initiatives overlook
According to Gallup (2016), up to 70% of an employee’s engagement is influenced by their manager.
This illustrates how important it is for companies to pay more attention to this aspect of the employee experience, but it is rarely measured in a systematic way that provides relevant insight. Employee’s experience of their leaders, and their interplay is in fact one of the most central aspects of an organization’s emotions and functioning.
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The importance of the leader and employee relationship is supported through extensive research on the so-called Leader-Member-Exchange (LMX).
According to a meta-study, the leader’s behaviors, perceptions, and expectations have the highest effect on how employees rate their relationship with the leader. This includes behaviors such as inspiring with a vision, building trust, encouraging, fostering intrinsic motivation, and several other supportive leadership behaviors.
Therefore, EX initiatives must support and measure the leader and employee relationship in a granular and timely way, and EX tech solutions must be tools to capture the emotional impact of these interactions. Only then will companies have visibility into what really happens in their organization, and be able to design and implement initiatives that really improve what employees experience.
How employees really experience their leaders
Early 2020, we conducted a global survey with more than 1.800 people from the logistics and transportation industry, with the objective to identify what employee experience at work. In particular two findings can help to shed light on what companies do not capture in the leader and employee relationship:
- Employees feel they give more than they get from their leaders. They rate their own engagement level to be at a level of 70/100 (indexed), while their experience of their leaders is a mediocre 48.
- Leadership behaviors are rated to be at a mediocre level. This particularly concerned supportive, empowering, and enabling leadership behaviors, that are essential for a high employee engagement level. (See Figure 1).
Again, we look towards the research, where Dierendoncks’ research on servant leadership (2010) identified, that empowering leadership behaviors have the largest impact on an employee’s level of engagement, and a significant effect on the performance. When these supportive and enabling behaviors are only scantly available, employees and organizations reach their full potential, neither in engagement nor in performance.
Few companies systematically measure how employees are emotionally impacted by their leaders, and the tracking of leadership moments as a part of the “Moments-that-matter” approach is underdeveloped. Therefore, what may superficially look like a good Employee Engagement level, can under the surface be severely compromised. Companies are unaware of the true emotional temperature of the organization.
Leadership may not be measurable, but the feelings that it evokes in people are. Instead of attempting to measure engagement in an aggregated way, companies must invest more into capturing the emotional impact that people experience and find ways to link this back to their leader’s attitudes and behaviors.
The opportunity: Make the Leadership Experience part of EX
Through the aforementioned survey, we identified that companies have a great opportunity in front of them if they can effectively upgrade their leaders’ empowering behaviors. Employees of leaders who demonstrate empowering and enabling behaviors, report a significantly higher level of Psychological Safety, Collaboration and Engagement. This finding is relevant for how companies develop their leaders and can inform the design of development programs on empowering, supportive and enabling leadership attitudes and behaviors. (See figure 2)
Recommendations for a better EX approach
In order to establish an EX and Employee Engagement framework that has a tangible positive impact on employees, the following points should be considered:
- Be clear on why you invest in an EX initiative. Is the objective truly to enable employees to thrive and perform, or is it an employer branding exercise?
- Definition of “Moments-that-matter” must be based on employee interviews, and specifically capture the moments they experience with their leader.
- Measure quarterly, instead of only once or twice per year. Business life is too dynamic to miss out on negative trends for several months.
- Integrate the leadership experience measurements into leadership performance reviews and development. Use the data to enable leaders to better understand their role and impact, and support them in adapting their attitudes and behaviors.