Wednesday, April 25, 2018

The curious case of the object and subject of Employee Engagement

"You should join us only if you fall in love with our company”, said the HR Head to a group of summer interns from premier business schools.

“I don’t think my exit should be considered as attrition; the company that I am leaving is very different from the company that I had decided to join”, said the OD Manager during his farewell.

I heard these statements quite some time ago. But they pop up in my mind whenever I think about employee engagement. The first statement (made by the HR Head), makes me think more about the appropriateness (or the lack of it) of the various metaphors used to describe employee engagement. The second statement (made by the OD Manager)  makes me wonder who or what exactly is it that the object of employee engagement and if employee engagement is a one-way street. Let’s explore these in a bit more detail in this post!

Employee engagement is a concept that is very popular these days as there is a significant amount of research that indicates the positive impact that employee engagement can have on business performance. Yes, like many fashionable things, employee engagement often gets trivialized into (‘fun and games’) activities that misses its core (See ‘Employee engagement and the story of the sky maiden’ for more details). While there are many definitions of employee engagement, a ‘strong emotional connect’ that leads to ‘discretionary effort’ is the central theme in most of these definitions. Also,  it is this ‘strong emotional connect’ that is one of the key underlying factors in the two statements that we started this post with!

Let’s start with the statement of the HR Head. He definitely had a point. Any transition to a new organization (especially when it is from campus to corporate) will have its own share of frustrations and if one develops a strong emotional connect to the organization (during the summer training, in this case) it becomes easier to overlook these frustrations.It also helps in not getting distracted at the workplace. The metaphor he used (that of falling in love, in the romantic sense of the term ‘love’) has remarkable similarities with the ‘strong emotional connect’ that we found in the definition of employee engagement sense. Yes, romantic love is a great enabler for 'pair formation' (and for recruiting one into the organization). Yes, this type of love can also lead to the employee putting in discretionary effort. 

The main problem is that people fall out of this kind of love, that too fairly quickly. To put it in another way, while it is a great enabler for pair formation, romantic love is not so effective when it comes to 'pair maintenance'. Also, as we have seen earlier in ‘Appropriate metaphors for organization commitment’, metaphors that are used to talk about the ‘employer-employee’ relationship often create complications because a metaphor is not an exact comparison and hence inaccurate/misleading meanings and assumptions creep in into our understanding of the relationship. Of course, metaphors have tremendous rhetorical value and hence leaders are tempted to use them for ‘motivating’ the employees (Please see ‘The Power of carrot and stick’ for a discussion on if there is any difference between motivation and manipulation)

Falling in love can lead to attachment or even possessiveness which can be counterproductive (see ‘Passion for work and anasakti’). Also, if the employee falls in love with the organization (and the organization doesn’t fall in love with the employee), it can lead to an exploitative relationship. Love that is not reciprocated often turns into hurt and hate very quickly!

Yes, there are other definitions of love, like the one Scott Peck uses in 'The Road Less Traveled' ('extending oneself for the spiritual growth of another') that can lead to discretionary effort without the complications mentioned above. But, those types of love are not something that someone can 'fall into' as it requires aspects like a higher purpose and conscious decision-making. 

This brings us to the interesting discussion on if it makes sense to (re)define engagement as conscious decision that the employees make instead of being an emotional reaction/outcome of emotional connect. While this sounds promising, this type of engagement (which is a deliberate decision) might not so easily lead to discretionary effort if the returns of that discretionary effort (which can very well be in terms of satisfying the higher order needs like esteem or self-actualization in the Maslow's hierarchy in addition to satisfying lower order needs like physiological and safety needs that are usually met by salary and job security). 

Yes, I have heard employees making statements like "I keep myself engaged regardless of what the organization does or doesn't do", though I am not sure if they used the term 'engagement' in the sense of discretionary effort (or just in the sense of keeping oneself focused on one's job). If it is the promised 'magic of employee engagement' (creating something out of nothing, like getting extra work done without paying anything extra for it) that get employers excited about employee engagement, then this definition can create complications! 

Now let’s come to the statement made by the OD Manager. Here the key issue is ‘what exactly is the ‘company’ that the OD manager was referring to when he talked about 'the company he joined' and 'the company that he was leaving'?’’ Is it the legal entity, is it the company brand , is it the products and product brands, is it the immediate manager, is it the team, is it the senior leaders, is it the CEO, is it the some higher purpose (other than making money) served by the company or is it the way get things get done in the company (company culture)? Most of the studies indicate the 'immediate manager' as the most important player in the game of employee engagement. But it could also be because the manager represents the organization for the employee and the organization's 'sins' are often incorrectly attributed to the managers (like when we say 'people leave managers and not organizations'; see 'Blame it on the managers' for more details). So, when it comes to the object of employee engagement, there are many possibilities and also many combinations of these possibilities!

If we examine the above list of possibilities (objects of employee engagement), we will find that most them can change and that some of them do change frequently in many organizations these days. This also indicates that the loss of social capital/breaking of working relationships during reorganizations can have an adverse impact on employee engagement. Again, it is possible that the employee’s preferences/factors that engage the employee changes during his/her tenure in the organization. So there are many moving parts here, on both sides of the equation, and that makes keeping the employee engaged quite challenging. Hence, employee engagement becomes a continuous activity and it requires a deep understanding and careful management of the evolution of the psychological contract!

 At a more fundamental level, the issue here is about the 'reciprocity' aspect of employee engagement. Why is it only about the employees feeling emotional connect to the organization (and putting in discretionary effort)  and not also about the organization reciprocating the feeling (and going out of the way to do something for the employees). Yes, as we have seen in the above paragraph, the 'object' of employee engagement can vary and hence the issue of who or what exactly is the 'organization' that is supposed to reciprocate  can further complicate things. May be, we can just say that all those who benefit from the the discretionary effort put in by the employee should reciprocate. While it is very clear that employee engagement benefits the organization, it is not very clear if it leads  to employee happiness or even employee satisfaction in the long run. 

So what does all this mean? To me, (employee) emotions are precious (or even sacred) and they should not be trifled with. Yes, emotions are also highly powerful in driving discretionary effort and they can lead to remarkable (business) results. So, organizations should engage the emotions of the employees only if they are willing to reciprocate (in terms of going out of the way to care for the employees in various ways depending on the context). If the idea is just to increase performance or to create accountability, there are other ways (that works on rational commitment and are well within the scope of the employment contract without getting into the domain of psychological contract) like goal alignment, performance management, gain sharing plans and performance linked incentives that can align the interests of the employer and the employee and hence address the 'principal -agent problem' (see 'Of owning and belonging' for more details). 

Hence, we should leverage the power of emotional connect (and the discretionary effort that comes from it) only if we are willing to look at employee engagement as a relationship (and hence a two-way street) and are able to consistently respond in a manner that respects and nurtures the relationship! Otherwise, we run the risk of the (perceived) intent of our employee engagement efforts resembling that which is often depicted in the cartoon strips on employee engagement (e.g. tricking the employees into 'gladly putting in extra effort without getting paid anything extra in return')!

Any comments/ideas?

Sunday, April 15, 2018

Of owning and belonging

"This is as much my company as it is your company", said the Organization Development (OD) Manager when he was having a courageous conversation with the CEO. While he was being deliberately provocative (safe under the 'Court Jester' immunity that he used to enjoy), what he said was factually correct, While the CEO was two levels higher than the OD Manager in the organization hierarchy, the CEO didn't have any other claim to ownership in the company that the OD Manager didn't have.

I do wonder if the OD Manager would have been able to make the same statement, if he was having this discussion with the head of a partnership firm (where the partner is both the owner and the manager) or if he was having the discussion with the CEO of a family-owned firm (where the CEO owns a large percentage of the shares of the company). In a way, this situation is ironic. The role and the mandate of the OD Manager is the same in all the three scenarios. The only difference is that in the second and third scenarios there is someone else in the organization who has an additional claim to ownership that the OD Manager doesn't have. So the question becomes, just because there is someone else who can say 'My company' in more ways than what you can, does the level of ownership you feel come down?

Let's push this thought experiment a bit more. What if the OD Manager doesn't have any interaction with the CEO and hence there is no way the CEO can convey this message (of having any special ownership claim) directly or indirectly? What if the owner gives up the CEO role and becomes purely an investor but holding the same large percentage of the shares of the company? What if the OD manager is given some shares of the company? Would the risk of the OD Manager feeling less ownership reduce in any of the last three scenarios? Again, if other things remain the same, would there be an impact on the level of  ownership based on whether the company in question is a public limited (listed) company or not?

This brings us to the question of what exactly is this 'ownership'. In business organizations, the phrase 'building ownership and accountability among the employees' is heard very frequently these days. To me, accountability is external (you are held accountable by somebody for something and it is usually reinforced with carrot and stick) whereas ownership is internal (it is something you feel). In a way, the relationship between accountability and ownership is similar to that between change (externally imposed) and transition (internal psychological transition that happens in your mind).

It is  interesting consider if 'ownership is a conscious decision that you take' or if 'ownership is a feeling that somehow develops in your mind'! It is also interesting to think about what exactly is the object of ownership. Is it your job? your team? your function? your organization or  some combination of the above with varying weightages? Yes, the answer can vary for different employees. It can also vary for the same individual across organizations or even within the same organization as one progresses in one's tenure in the organization.

While there can be a difference in opinion on whether ownership is a decision or a feeling, there is agreement on the behavioral manifestation/outcome of ownership. They include taking personal responsibility for the outcomes, going the extra mile, careful use of the resources and even passion for work or the group. These are obviously highly useful to the organization and hence the enormous amount of good press enjoyed by ownership.

In a way, the question of whether your sense of ownership would reduce just because someone else is around who has more claims to ownership is a funny one. It is like asking just because there is someone (nearby or far away) who is more attractive than you, would you feel that you are less attractive as compared what you feel about yourself when you are alone. In another way, this question is not trivial, because the degree of ownership you feel has important implications for your organization (in terms of your productivity on the job) and for yourself (your happiness and satisfaction).

In Economics, this issue of ownership and accountability is represented in terms of the ‘Principal-Agent problem’. The fundamental issue here is the lack of perfect alignment between the interests of the Principal (Owner/Employer) and the Agent (Employee). Hence, the proposed solutions under the ‘economics model’ are in terms of increasing the alignment by mechanisms like profit sharing, employee stock (option) plans, aligning the objectives of the employee to that of the employer through performance management system backed up by close supervision, performance linked incentives and the threat of termination of employment if the employee actions don’t align with what the employer wants. While these have their relevance, they run the risk of (further) shifting the employer-employee relationship to the transaction paradigm away from the relational paradigm and to extrinsic motivation away from intrinsic motivation. In a way, this makes the contents of the psychological contract very close to that of the employment contract and hence makes the degree of ownership essentially a matter of rational (and not emotional) choice! So, when we operate under this economic paradigm, the Organization Citizenship Behavior (employee behavior that is discretionary/not directly linked to the formal reward system, and that in the aggregate promotes the effective functioning of the organization) and/or Extra-role Behavior (behavior beyond the role-expectations that can benefit the organization, including whistle-blowing and principled dissent) might take a back seat!  

Now, let's look at another type of situation where we use the term 'my'. For example, when I say 'Kerala is my state', what I mean is that I belong Kerala (and not that I own Kerala!). So, ownership can also be about belonging. Another example is that of a 'family'. When I say it is 'my family', I mean that I belong to the family. Of course, if this belonging is sort of 'permanent' it is much easier to accomplish. So, I can say that 'it is my company' also in the sense that I belong to this company, especially if I am confident that this company will continue to be my company for the foreseeable future. Of course, I should also feel that there is a deeper connect between me and the company (in the sense of shared purpose and values), that I have a say in the organization, that I can make a significant contribution to the organization and that I am valued.

This also highlights the power and peril of using the 'family' metaphor in the organization context. If  a company uses the family metaphor ('we are all one big family') consistently, it can act as a 'nudge' to the employees to take higher degree of ownership. However, the other associations/assumptions that come with family metaphor (like somewhat unconditional and permanent membership) also gets generated in the minds of the employees. Hence, if the company does a downsizing after that, it would be much more painful (more like a divorce and not just termination of a contract that is economic/transactional in nature) and it is likely to be perceived to be unfair (you don't expect that you will be expelled from your family). 

From the above discussion, it is curious to note that in many of the family owned firms, while there is definitely a risk in creating 'ownership in the sense of possession' (the employees don't own the company and the owner-manager does), it is often compensated by a higher sense of 'ownership in the sense of belonging' (personal connect with the owner and the other employees, long tenures, job security etc.). 

Where does this leave us? This post is meant to facilitate a discussion and it raises more questions than it answers (and may be, there are no standard answers to many of these questions!). We can definitely say that ownership need not be in the sense of 'possession'. It can also be in the sense of belonging. Of course, these are not mutually exclusive and they can reinforce each other. Yes, the employees having a high degree of ownership is becoming increasingly important with taking initiative, creativity and discretionary effort becoming evermore critical for business success.

The sense of ownership is experienced in the context of a relationship and a mental model(or paradigm). There are some important aspects of this relationship like empowerment, trust, continuity of the relationship, managing the psychological contract throughout the tenure of the employees etc. Hence, this relationship needs to be nurtured in an ongoing and consistent manner! While the sense of ownership can be beneficial for both the organization and the employee, it often comes with expectations and attachment (anasakti is not so easy). Hence, appropriate metaphors should be used, with extreme care, to manage the mental models that govern the employment relationship. 

Now, over to you for your comments/ideas!

Wednesday, April 4, 2018

The OD Quest: Part 7 – Integrating the mystical and the analytical!

"I don’t have an opening in my OD team now. But, you can join our recruitment team and do recruitment in the OD way”, I heard the Senior HR Leader telling a candidate who was hell-bent on joining the OD team. This was my fifth ‘encounter’ with this gentleman (See 'Passion for work and anasakti ‘, 'Appropriate metaphors for organizational commitment ‘ ,‘To name or not to name, that is the question’ and ‘A Mathematical approach to HR’ for the outcomes of my previous interactions with him).

I was a bit taken aback by what I just heard. I knew that often these kind of ‘solutions’ will end in tears or worse. However, similar to what had happened during my previous encounters with him, this interaction forced me to think a bit more deeply about the underlying issue - the application of OD(Organization Development) to the various functional areas in HR (Human Resource Management). That, in turn, has prompted me to write this series of posts on 'The OD Quest' where we will look at the possibilities  that arise when OD ventures into other parts of the people management terrain.

In the first post in this series (see
The OD Quest: Part 1- Mapping the terrain) we did a cartography of the Human Resources (HR) and Organization Development (OD) domains to map out the current world (the terrain) inhabited by HR and OD and also the evolving worldviews in HR and OD (ways of looking at the terrain). In the second post (see The OD Quest Part 2 : Doing Recruitment in the OD way) we made a visit to the land of Recruitment and explored the value OD can add to Recruitment. In the third post (see The OD Quest: Part 3 – Rendezvous with L&D) we covered the Rendezvous with L&D. In the fourth post we saw how OD can sweeten Rewards and make it ‘Total Rewards’ (see The OD Quest: Part 4 – Totally Rewarding). In the fifth post, we explored a domain (Industrial Relations) that has often been considered as the antithesis of OD (see The OD Quest: Part 5 - Face to face with the antithesis?). In the sixth post, we took our quest to the domain of HR Business Partners and explored the immense possibilities for mutual value addition (See The OD Quest: Part 6 – In the wonderland of HR Business Partners). In this post, let’s take our quest to the most quantitative domain HR – HR Analytics. For the purpose of our discussion let's define HR Analytics as the application of data science and statistics to improve the quality of people-related decisions.

Organization Development (OD) with its emphasis on social construction of organization reality and focus on work at the level of mindsets, values and basic underlying assumptions is as ‘mystical’’ as one can get in HR. HR Analytics with its emphasis on quantification and use of advanced statistics is as analytical as one can get in HR. So the question becomes, is there anything that the analytical and mystical learn from each other? It has been observed that the interaction between apparently unconnected fields often yields rich dividends. So, let us see what treasures can we unearth in this phase of our OD quest!

I have had the good fortune to straddle both these worlds - organization development and analytics. I have made a living out of OD for more than a decade. I have set up the HR analytics function in two of the companies that I have worked in. I am also a lean six sigma black belt (and hence familiar with both the possibilities and limitations of its fundamental approach of converting a physical problem into a mathematical problem, finding a mathematical solution and then converting the mathematical solution into a physical solution). Managing these two fields at the same time (without creating cognitive dissonance) has been a very interesting experience!  

To me, quite a bit of the apparent distance between the two fields came about because of the skill sets of the role-holders and the separation in the organization structure and not just because of ideological differences. In most of the organizations, people with OD skillet don't usually handle HR analytics and vice versa. Also, typically (stereotypically?!) OD professionals are more skilled in qualitative modes of  exploration whereas the HR analytics professionals are more skilled in quantitative modes of exploration. Again, while OD is usually housed within the HR function, the HR Analytics function is often housed in the Business Analytics function. This sometimes lead to a situation where people handling HR Analytics are mainly data scientists without experience in HR and they just take the requirements from HR Mangers, do the analysis and give the results back to the HR Managers (and hence in a way work mainly in the mathematical problem-mathematical solution part of the problem solving approach mentioned above). This compartmentalized approach can lead to significant loss of opportunity in deriving meaning and actionable inferences from the data.

While the most frequently used modes of exploration are different (qualitative versus quantitative) in the two fields, the fact still remains that both the fields are often exploring the same organization reality. This is the fundamental point of convergence between the two fields.

Of course, there are issues related to stereotypes. Many of the people in OD are skeptical about the seductive power of numbers and their ability to mislead  where as people in HR analytics are often vary about the fluffy and vague nature of OD and the pathological reluctance to define things precisely and in a standardized manner. But, the purpose of both the fields is to facilitate more effective problem solving and decision making in organization, especially on people related aspects. So, there is a logical need  to work together and based on my personal experience, I can confidently say that the possibilities for mutual value addition are immense.

The Achilles' heel of OD is the inability to give confidence to the business leaders that the OD managers understand the hard realities of business and that that they can facilitate tangible improvements through the OD initiatives. Hence, many business leaders look at OD as something that is done to improve esoteric things like culture and that too only when the business leaders have some spare time after they have addressed the important business issues. I have also seen very senior OD professionals becoming uncomfortable and hence losing credibility with the business leaders when the discussion moves to pure numbers - business numbers and people related numbers/analytics. Working together with HR analytics professionals and enhancing the comfort with numbers and quantitative analysis can enable the OD professionals to start the conversation in the language that the business leaders are often more comfortable with and then (after some level of trust has been built) lead them to other modes of exploration. 

Of course, leveraging HR Analytics can facilitate better diagnosis and solution design during the OD intervention apart from helping in evaluating the implications of the possible solutions and in tracking improvements and in demonstrating the results of the intervention.

The action research method lies at the very foundation of the field of OD and it is a data-driven approach (systematic approach to data collection, analysis, feedback and enabling problem solving/decision making) to organizational change. Of course the data can be quantitative or qualitative in nature. May be because of the skillsets of most of the OD practitioners, use of qualitative data and data analysis techniques became more prominent. While these are indeed useful, they miss out on the insights on the relationships between the key variables that can be unearthed using  statistical modelling. Not leveraging quantitative analysis can also increase the risk of ‘dangerous half-truth’ creeping into the OD practice masquerading as conventional wisdom!
Similarly, the Achilles' heel of HR analytics is the inability to ensure that the analytics (the measurements and the analysis) accurately capture and is appropriate for the underlying reality that is being analyzed (See A Mathematical Approach to HR?). Another deadly temptation in HR analytics is to take a large database and then look for patterns in the data. This is more of 'data fishing' and not analytics. The problem is not that one cannot find patterns. The problem is that it is difficult to figure out which patterns are relevant or worth exploring for supporting decision making. Even when a significant pattern is detected, it might not be a simple matter to figure out how it should impact the decision-making. For example, if the analysis of employee attrition and its business impact clearly shows that early attrition is very costly to the business and that the early attrition rate among female employees is twice that among male employees what action should it trigger? Don't hire female employees (so that the cost can be avoided) or make extra investment/efforts to retain them? Obviously, this is a matter of what does the organization 'value' and why. OD can help in facilitating this kind of deeper exploration.

OD can also help in terms of facilitating a deeper understanding of the underlying reality and in creating conceptual models so that better hypothesis formulation for testing through analytics can be enabled. This is especially critical now, as the expectation  from HR analytics is shifting from descriptive analytics (that mainly describes the past) to predictive analytics ( that focuses on predicting the future). OD can also be very helpful in creating a compelling narrative based on the results of the analysis that can maximize the chances of the analysis actually informing the decision making process. Also, unless this (leveraging analytics to inform decision making in a consistent manner) is taken up as an integrated change management initiative, there  is very limited possibility that something truly useful would come out of HR analytics.Since OD is essentially about facilitating change, OD can be of immense help here.

So where does this leave us? A triangulation approach of combining an essentially qualitative method ( the traditional domain of OD) and an essentially quantitative method (traditional domain of HR analytics) can almost always lead to much more comprehensive understanding of the organization context/reality and hence facilitate much better decisions.

At some level, this is about enhancing your toolkit so that you are not limited by your tools so that there is less chance of all problems looking like a nail (e.g. problem with the culture of the organization) because the only tool you have is a hammer (e.g. culture mapping tool). At a deeper level, it is an acknowledgement of the complex nature of reality (that needs different lenses to see clearly) and the fact that human affairs are often over-determined (there are multiple causes to a situation). As the organization contexts becomes more complex and dynamic, this becomes an absolute must. If the initial sense of 'strangeness' between OD and HR Analytics is overcome by working together and getting to know each other's craft better, an immense amount of mutual value addition (and value addition to the organization that employs both of them) is possible!

Any comments/suggestions before we take our OD Quest to the next domain in the HR land?