Date: 03/04/18 | Duration: 00:15:59

What is the connection between productivity and engagement? It’s a key question for organisations and much debated in the HR community. Do engaged employees always work harder, smarter or more efficiently? Does a productive worker always mean an engaged worker? Can you measure the relationship between productivity and engagement?

In this episode we look at both sides of the engagement/productivity debate. We explore the evidence that links the two and we discuss the many ways in which engagement (high or low) can impact an organisation. We also offer advice for HR professionals on assessing their own companies’ engagement levels and tips on getting a better understanding of the productivity and engagement relationship.

Paula Leach: There is something different about outlook, there is something different about the way in which teams embrace and just get working on something even if they don't know the answer.

Philippa Lamb: That was Paula Leach, head of people at the Home Office, pondering one of the great mysteries of our time, the productivity puzzle. Now Paula spent nearly two decades working with Ford in the US where on average workers produce 30% more an hour than we do.

Paula: So you could describe it as ambition or you could just describe it as just starting.

PL: Interesting. So perhaps more of a willingness to embrace failure along the way as well.

Paula: Yeah it could be, there's definitely an optimistic outlook.

PL: Now of course Paula wouldn’t suggest that something as intangible as outlook alone could make us 30% more productive. And another driver that always pops up in any discussion about productivity is engagement. We’ve all heard that story about the janitor at NASA. President Kennedy asks him what he's doing and he replies, “I'm helping to put a man on the moon.” He became a symbol of the engaged worker and, so the theory went, if workers are engaged they will get more done. But what does being engaged actually mean and does that theory even stand up? Paula and her team are now midway through the Brexit process, one of the biggest manpower projects since the second war, so she's no stranger to the challenge of building teams to tackle large tasks. Here are her tips for creating a productive team.

Paula: An absolute focus on the process and really understanding how you can create the smoothest, leanest, most frictionless process from beginning to end is the first key to productivity.

PL: And that's worked really well for the automation industry hasn’t it, which in some ways, as you say, is a simpler animal than others because you are making a thing, you bring in resources, you turn out a product, more complex for other organisations.

Paula: It is more complex for other organisations but the trick I think for many organisations is to try and simplify the complexity and if you think about things from an end to end experience you can usually draw some line through that. So there's a process discipline. There's also a discipline I guess it’s really around the highest performing teams that you can have and I think that translates itself into a people business a bit more than a component business. And that is that the more we’re able to have everybody understanding exactly what they’re doing in contribution to common cause and operating at the highest productivity that they can that's sustainable, so I say that because I don't think human beings have the capacity to operate at full 100% all of the time without the ability to recharge and pause, but understanding how we create, not only the mindset but the skills and capability I think it’s how that translates into a people system.

PL: So the factors you've been describing in terms of raising people performance they would all come under the umbrella of engagement, in its broader sense for you?

Paula: No I don't necessarily think it is just engagement. I think it’s a blend.

PL: And we hear a lot about the role, the supposed connection between engagement and productivity but it’s hard to demonstrate it sometimes isn’t it?

Paula: It is, yes it’s about how engaged somebody’s feeling, it’s about their wellbeing such that they have a predisposition to being able to operate at their best performance, it’s also about having the clarity of a goal and being able to understand what good looks like. So it’s absolutely got to be yes about shared purpose, clarity of goal, clarity of my role in that and what great looks like and me being motivated to do all of those things.

PL: Which all sounds eminently sensible and yet many organisations have done their homework, put theory into practice, rolled out engagement schemes and seen very little, if any, gain. The hard truth is there is no straight line correlation between engagement and productivity.

Paula: Well so we’re dealing with human beings so to have all of those things completely lined up sounds great on paper, to actually try and achieve that in an organisation is really, really difficult, partly because they're complicated and there's lots of different things that pull us in different directions, even if we have one overall goal there's lots of diversions, but also because people have feelings. That motivation and our productivity is affected by all the things that are happening around us and how we respond to that and then multiply that by however many hundreds, thousands of people you might have in one organisation.

PL: So good engagement scores don't necessarily tell the story of what’s really going on in people’s heads?

Paula: So I love an engagement survey and I think it’s really important because it’s a moment in time and it’s one way of trying to understand what’s happening in your organisation and if you don't have those measures it’s quite difficult to get anonymised aggregated information about an organisation, how it feels and about how individuals feel.

PL: There's a but hanging in the air!

Paula: The but is it isn’t the be all and end all. I think using it as a platform, using it as a springboard and ensuring that we give people the ability to follow up with that voice is really, really important.

PL: So we know the engagement survey is a starting point not a destination but what does it tell us about productivity? Do engaged employees always work harder, smarter or more efficiently? And if it’s not being emotionally, cognitively, physically engaged that makes us more productive what does?

We asked two experts to help us untangle that puzzle – Dr Ilke Inceoglu is professor of organisational behaviour and human resource management at the University of Exeter Business School. Duncan Brown is Head of Consulting at the Institute for Employment Studies where he leads on HR and reward.

So when it comes to productivity how big a part do they think engagement plays?

Duncan Brown: Yeah that's the 64 million dollar question and it’s so hard to answer because it raises really a key question about what’s productivity and what’s engagement. For the past 20 – 25 years there’s been ups and downs but broadly we’ve grown about 2.5% to 3% and yet since the crash in 2008 we’ve at best grown at half of that. So a lot of debate about why is productivity not at the levels. And what seems to be emerging is the human factor but what that component is, the extent to which it’s employees engagement and beliefs and commitment to high productivity or to what extent it’s their skills, or even their pay, some people argue people’s pay is too low and that's what we should be doing increasing their pay. So lots of debate.

PL: So there has been, certainly in recent years, a huge amount of time and resource devoted by the HR community and management generally to this idea of raising engagement in the workforce but that hasn’t translated into better productivity has it?

Ilke Inceoglu: When we look at the macro level it’s very difficult to show that.

DB: Yeah and interestingly it hasn’t really translate[d] whatever engagement is. If you can measure it in most national measures and corporate measures it hasn’t actually translated into higher engagement either.

PL: It’s interesting you say that because we talk to organisations all the time who flourish their engagement scores and say, “Look how well we’re doing,” but your general sense is across the economy?

DB: Yeah. If you look at the major providers in these areas generally they’re showing flat ratings. They generally show the UK and Europe are low compared to the rest of the world. Employee involvement comes out as a far more significant driver of performance than virtually any other HR practice.

PL: And what exactly do you mean by that?

DB: That actually workers are consulted, they’re spoken to, they feel their views are inputted and they are taken account of.

PL: So it’s employee voice it’s not necessarily autonomy it’s voice?

DB: Yeah and if you take, probably the best summaration [sic] of Engaging for Success, the movement that the RPD’s heavily involved in, their first report in 2009 they highlighted four generic factors that they thought would be high engagement and high productivity and voice was the most significant of those.

II: We also have some new research showing that employees find challenging work can be engaging, so job complexity, job responsibility, but that only makes people engaged if that's also supported by the relevant training so they can actually do the work they are supposed to do well.

PL: There does seem to be this sense, certainly in areas, the NHS, that even adversity is bonding people together, because it’s such a testing environment and that adversity drivers performance in its own way. So it’s the flipside almost of everything we might attempt to do in terms of building engagement. It’s a negative experience but it is driving engagement. Would that be a fair analysis?

DB: Definitely and I think in a way, the NHS has done some fabulous work really with although interestingly they call their survey which they use nationally the Staff Survey, they don't call it the Engagement Survey, but they’ve got really good materials that they use, guidance for managers, how to think about the engagement and the motivation of your staff and how to work on improving it. In a way it’s a kind of model example of if you are going to use engagement that's probably the way to do it, tailoring the thing to suit your setting and your staff seems key.

PL: So has that been a long-standing problem do you think in this whole debate that everyone’s been looking for convenient silver bullets?

DB: Imagine, yeah.

PL: Can I just pursue this adversity, productivity out of adversity idea because I am interested in it because we’ve seen examples in the past in very hot-housey environments, aggressive environments in the City, trading floors, no one would say they were pleasant places to work, yet extremely high productivity in some of those instances, obviously very toxic, other environments, the military springs to mind, lots of occasions where people aren’t bonded by pleasant experiences, by things that HR and management are doing, they are bonded by the sense of common purpose aren’t they, that they’re doing something worthwhile in adversity. It’s powerful isn’t it? A powerful driver.

II: Very actually and looking at my own research we also find that sometimes people find that something that they find quite challenging and if you ask them do you actually want this responsibility or this level of workload they might say, “I'm actually not sure,” but then they are put into that situation and they master it, that can be highly exciting and elevating.

PL: So has the community been looking at this idea of engagement the wrong way round do you think? Have we been driving on the small, making an environment too embracing and generating complacency perhaps? Do we need more edge, bite, difficulty in our workplaces?

DB: I think there's certainly an argument that the concept has outlived its usefulness, from my perspective I think looking over the last decade I think it was initially quite helpful to get people aware of the importance of knowing how their staff felt.

PL: Yeah and actually thinking about their people as more than just parts of the machine.

DB: Exactly and I think they were very convinced by some of the research and so I think that was very helpful but then as you implied almost then the adoption of common survey tools, we all did the survey and we all competed to get the highest participation rates and the top employer to work for and all that stuff. And also HR picking up almost common templates of best practice when whatever evidence there is, is it’s got to be tailored to your own workforce.

II: So I wouldn’t write off the concept yet but I think it’s a really good point that it’s been overused.

PL: I'm going to ask you an annoying question given you've given me a great, long, useful list of all the stuff we should be doing, they don't do all that stuff in France and yet they’re still 20% better than us on the productivity front, why?

DB: That's a great question actually which economists keep asking themselves. I mean certainly I think skill seems to be a key area, coming back to the skills agenda, I think the recent OECD analysis of the UK really said we had an unusually high proportion of low skilled jobs and that's of course been a key area of growth in the economy. Skills I think is a key area.

II: Yeah skills and areas for development. Skill use and opportunities to learn more are linked to engagement. So that could be one. The research hasn’t really looked a lot at factors outside work that also influence your engagement levels, work/life balance is one that has been linked to engagement. That's probably where the French, well we know that the average working hours are lower, so that could be another aspect contributing to it.

PL: Are cultural issues more central to this than we know?

II: Yeah the drivers of engagement could differ across cultures. I think some people have looked at it. As an example in some cultures, for instance China, cohesion is a lot more important. So that's something that could drive engagement more. I think feeling excited about your work then in countries in Northern Europe or in the UK or Germany.

PL: That’s an interesting point you need to look at your own organisation if we’re taking it down to the tiny level to know what needs…

DB: Or your own countries yeah.

PL: Your own country, your own sector…

DB: If you’re the Prime Minister up there.

PL: …your own organisation to know what needs to be done. Interesting discussion. Thank you both very much. I get a strong sense we’ll be talking a lot about this in future.

So what can we take from this? Most people agree that a highly engaged workforce is a good thing but companies need to be thoughtful about what their engagement scores are actually measuring. You can be engaged yet unproductive or highly productive in a role you’re not actively enjoying. So relying on engagement scores to understand where the energy lies in your organisation may mean you are missing the bigger picture.

For more on engagement and productivity head to the CIPD website for a wealth of reports, briefings, blog posts and of course our archive of podcasts all about people and work, the professions longest running podcast series.

Thanks for listening. Join me again next month.