Beware of unwanted employee engagement metrics for ESG reporting

Story Highlights

  • Reliable measures of employee engagement reliably predict performance
  • Too many organizations settle for unscientific engagement metrics
  • Only rigorous methods of engagement will lead to the success of ESG initiatives

A recent Mattress Firm ad begins, “We’ve got a problem, America. Unwanted sleep.” The ad lists the consequences of poor quality sleep, from forgetting names to forgetting what your boss told you not to forget. At the end, Liev Schreiber intones: “Did you get up on the wrong side of the bed this morning, or the wrong bed?”

The reality is that there are “unwanted” versions of internal corporate initiatives. Just as not all mattresses are created equal, neither are all employee engagement surveys. In reality, many organizations use a junk employee engagement survey — and this will soon have serious consequences for many of them in terms of new ESG regulations and new stakeholder expectations.

ESG refers to environmental, social and governance criteria to assess organizational success beyond profit. It challenges leaders to move from a single focus on short-term profit to long-term sustainability and the interests of all stakeholders.

Gallup closely follows the ESG movement and its impact on workplaces around the world. Currently, leaders decide which metrics they should use to measure their organization‘s ESG progress. Employee engagement naturally falls into the “S” or social part.

But at Gallup, we know engagement goes way beyond the “S.” Engaged employees unlock an organization’s potential through everything initiatives. Commitment is the engine of organizational change because it makes it possible to identify employees who are well supported by their manager and motivated by the mission. When organizations face ESG-related challenges, engaged employees will be frontline innovators and problem solvers.

So what’s the problem here?

How to Spot Unwanted Employee Engagement Surveys

Most large organizations measure employee engagement. However, there are many ways to measure and report on employee engagement, and not all of them are equally insightful, insightful and actionable.

When organizations face ESG-related challenges, engaged employees will be frontline innovators and problem solvers.

For example, Gallup’s employee engagement metric, as measured by the validated Q12 survey, points out that only 20% of workers in the world are engaged. (In the US, it’s 32%).

And yet, it’s easy to find organizations with serious culture issues, poor customer experience reputations, or poor sales performance who say 80% of employees are engaged.

What is the difference?

Gallup is committed to helping organizations thrive by unlocking the potential of their people. This means that Gallup’s engagement metric is designed to be highly predictive of team and organizational performance – a true gauge of human potential.

In contrast, many organizations survey employees and categorize them as engaged when, for all intents and purposes, they’re just content – they’re not emotionally invested, because most definitions of commitment lend themselves to it. For example, analysis of employee engagement surveys typically associates partial agreement with full agreement. According to Gallup’s definition, this is closer to a measure of satisfaction than engagement.

There’s no business reason to define engagement as contentment except to inflate the percentage of engaged employees on a corporate dashboard. While 80% engagement looks good on paper, it obscures the strengths and cultural weaknesses. When it comes to employee engagement, there’s a big difference between trying to look good and painting a clear picture of what’s really going on in an organization’s culture.

While it’s true that Gallup’s engagement metric represents a higher bar, we believe our method more accurately measures the type of psychological engagement that makes a difference in employee motivation and productivity.

So how do you know if an employee engagement report is waste? Ask the following questions:

  • How is the survey written? Some surveys are unintentionally worded in a way that encourages positive responses.
  • Who was invited to do the survey? Some surveys are only a sample of employees, not a complete census.
  • How are scores calculated? As mentioned above, many reports combine responses to inflate scores, adding people who are only moderately engaged in their organization, to get a more favorable result – even though many of them may seek employment elsewhere. .
  • Can your organization demonstrate a causal link between engagement initiatives and increased engagement? The measurement of causality is real science, not speculation. Gallup works with its customers to show leadership that actions and initiatives work.
  • Has your organization associated high or improving scores with positive business results? Gallup’s Last Q12 A meta-analysis of 112,312 teams found that highly engaged teams see higher productivity, quality, customer loyalty, and profitability, compared to low-engaged teams. Gallup has 10 iterations of the meta-analysis and continually studies and validates the findings and this impact is highly generalizable across different types of organizations around the world.

How leaders should publish ESG and engagement numbers

As we mentioned at the beginning, employee engagement is critical to the success of ESG initiatives. Engaged employees will ultimately drive the real progress of these efforts. Therefore, knowing the true level of employee engagement in your organization will be an important part of your leadership dashboard.

As ESG becomes more central to evaluating organizations, how the “S” is reported will become increasingly important to investors, suppliers, communities, job seekers and customers. Stakeholders will be wary of metrics that sound too good to be true – they will look for organizations that hold themselves to high standards. Professional investors will see through the unwanted metrics.

Gallup recommends the following for ESG monitoring and reporting:

  • Drive change internally using a validated employee engagement survey to predict employee behaviors and future performance. To scale culture and productivity, leaders need an in-depth and validated engagement measurement tool like Gallup’s Q12, which provides broad visibility into what drives individual and team performance. Using employee satisfaction as a metric to gauge engagement, culture, and future performance is like using revenue as the sole metric on your financial state — it doesn’t provide a complete picture of your financial health.
  • When reporting for ESG purposes, use Gallup’s People and Planet 5 public survey. Gallup has identified five workplace experiences and dimensions that are highly predictive of future behavior and business outcomes, specifically related to ESG. We recommend that all organizations add the corresponding survey elements to their current employee surveys to include the voice of the employee in your ESG reports. You can see the technical details here.
  • If you post engagement scores, be transparent. When it comes to reporting employee engagement or other people metrics externally, there’s one thing all organizations can do to build credibility: publish the full range of responses. At scale. For example, if a survey uses a five-point scale, list the percentages for all five points of the scale. This allows organizations to avoid inflated reports by combining numbers. It communicates transparency and the pursuit of excellence.

Leaders have a serious choice. Are you going to promote employee engagement numbers that look good on paper but don’t represent the true culture of your organization? Or will you measure employee engagement in a way that represents reality and helps you achieve your organization’s ESG goals and aspirations?

Support ESG initiatives in your organization:

Authors)

Ed O’Boyle is Global Practice Leader and Executive Consultant at Gallup.

Andrew Robertson is a management consultant at Gallup.

Ryan Pendell contributed to this article.

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