1. RETHINKING
EMPLOYEE
ENGAGEMENT
WHERE DO YOU START?

2. Edelman Change and Employee Engagement
TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................................. 2
EMPLOYEE ENGAGEMENT: COMPETING DEFINITIONS ............................................................ 3
EMPLOYEE ENGAGEMENT: LINKING EMOTIONS AND ACTIONS ............................................. 4
REALITY CHECK ............................................................................................................................ 8
A BEGINNING ROADMAP: RETHINKING EMPLOYEE ENGAGEMENT ....................................... 9
1

3. Edelman Change and Employee Engagement
EXECUTIVE SUMMARY
Only one in five workers is giving full discretionary effort on the job. At the same
time, companies with highly engaged employees outperformed the total stock
market and enjoyed total shareholder returns 19 percent higher than the average
in 2009, while those with low engagement levels saw total shareholder returns
44 percent lower than the average. The case is clear for better employee
engagement, yet according to a recent global research study by Edelman, many
organizations struggle to understand what engagement truly looks and feels like
and how best to invest in sustainable efforts to improve it, particularly during times
of change. Companies can score well on employee engagement surveys and still
“I’ve never had control and
be challenged with creating or reinventing an environment that fosters effective
I never wanted it. If you
collaboration, innovation and decision-making, involving leaders and employees in create an environment
taking the company in new directions or cultivating them as willing ambassadors where people truly
for the company and its brands. participate, you don’t need
control. They know what
Traditional views assume employee engagement is owned by the organization needs to be done and they
and HR rather than by leaders specifically. These same views focus on employee do it…We’re not looking for
satisfaction and commitment at a point in time, based on relatively static elements blind obedience. We’re
looking for people who on
like pay, benefits, recognition, career opportunity, work environment, job tools and
their own initiative want to
tactical communications – analysis of which stops short of providing relevant be doing what they’re doing
insights for leaders on how to manage the total business differently or better in an because they consider it to
ever-changing environment. This report is a compilation of discussions and be a worthy objective.”
interviews with approximately 30 global organizations representing a variety of
industries. It presents an alternative framework for employee engagement, which – Herb Kelleher,
focuses on addressing the actions and mindset of employees and leaders during former Chairman and CEO
change. It answers questions like: of Southwest Airlines
What should employee engagement look like for a company introducing a
new corporate strategy, entering new markets or shifting to a more customer-
or solutions-centric mindset?
What are the behaviors that should define employee engagement in
these situations?
What specific role should leadership play in increasing employee
engagement?
This contrasting view can help your organization rethink pathways to reshape
employee mindsets, leadership behaviors and workplace practices and
communication to deal with change and the realities of your specific business,
today’s economy and the communications landscape.
2

4. Edelman Change and Employee Engagement
EMPLOYEE ENGAGEMENT: COMPETING DEFINITIONS
Traditional models of employee engagement define it by measuring employee perceptions
of key drivers from an HR and a cultural perspective – things like pay, benefits, recognition,
career opportunity, work environment, job tools and tactical communications. However, in
everyday discussion, employee engagement is increasingly re-interpreted,
misunderstood or misdiagnosed and many times
interchangeably referenced with internal or employee
communications, employer branding or even
employees promoting the company or its products.
Two recent studies by leading HR consulting groups
highlight the challenge of defining employee
engagement. One group reported that employee
engagement had fallen to a 15-year low during the
recession period. Just days later, a second group
released a study that found employees performed
their jobs with a higher level of engagement during the
recession. These vastly different conclusions illustrate
the countless – oftentimes competing – ways
companies define, measure and achieve engagement.
Our own research confirms this. In a recent global employee research study, Edelman
interviewed 30 multinational companies with various offices represented in the US, UK,
France, Germany, Spain, Brazil, Malaysia, Singapore, Thailand, and Indonesia on their
views and approaches to employee engagement during times of change.
Here’s what the study found:
We confirmed that companies are indeed struggling to define engagement and how to
achieve it during times of change, despite the traditional approaches, tools and
measurement mechanisms available to do so. Some companies interviewed defined
employee engagement in emotional terms – satisfaction, pride and motivation. Others we
spoke to acknowledged employee engagement is necessary but elusive especially in tough
times. In several cases, companies believed they are effectively impacting engagement
through their management and communication practices. In the last two years, an
increasing number of organizations are listing “rebuilding employee engagement” as a top
priority on their Strategic Plans or Balanced Scorecards. However, it’s clear that no one-
size-fits-all definition of employee engagement is sufficient, and the approach to and
ownership of it differs widely around the world.
Finally, our research found that it is commonly assumed HR and the organization broadly
own employee engagement, rather than leadership specifically. While leadership is
directly in a position to influence employee engagement the most, few organizations
hold their leaders directly accountable for improving it with specific behaviors and actions.
3

5. Edelman Change and Employee Engagement
At the same time, current approaches to employee engagement research stop short of
providing relevant insights for leaders on how to respond and manage the total business
differently or better in an ever-changing environment.
What’s needed? Companies large and small, in the US and globally, acknowledge the
importance of employee engagement. But given the confusion around what engagement
truly looks and feels like, and exactly how to achieve it, it’s clear that an alternative
approach is needed, rather than a one-size-fits-all approach. To increase employee
engagement in today’s dynamic economy, a company’s efforts should:
Inform and emphasize leadership’s role
Drive new thinking as well as behaviors needed for the business
Be unique to each company’s desired business outcomes
Help organizations respond to change
Use communications to lead and shape internal dialogue
Account for the employee role in influencing the external publics important to the
business
EMPLOYEE ENGAGEMENT: LINKING EMOTIONS AND ACTIONS
In reviewing the global research and our experiences with a broader set of clients, it’s clear
that companies with highly engaged employees have found a sustainable way of linking the EMOTION-ACTION
emotions of employees with the collective actions needed to advance the business. DYNAMIC
We call this the Emotion-Action dynamic. In this view, employee engagement is both 1. A willingness to
(1) a willingness to link one’s personal interests with those of the organization, as well as, link one’s personal
(2) from a company standpoint, the evolving ability of leaders and employees to interests with those
understand, act upon and champion the priorities of the business. of the organization
2. The evolving
Exploring and measuring these two elements as well as defining specific leadership ability of leaders
actions to drive improvement in these areas can help define a specific and actionable and employees to
path for improving employee engagement at your company during times of change. understand, act
upon and champion
the priorities of the
Example: Deepening the Emotional Connection with Employees business.
Facing a tough year with lagging employee engagement, one retail company CEO
challenged his C-Suite to reinvent the employee experience in order to regain the lost
connection between senior leadership and the global employee base, now increasingly
a Millennial population that valued working at the company for different reasons than
employees in previous years. The company initiated a pulse study to investigate the
emotional connection between employees and its brand. They found that the brand
and the employees shared a common passion – making a positive impact in their local
communities. More than three-quarters of employees said they strongly welcomed the
opportunity to volunteer in their communities, including on behalf of the company. Many
4

6. Edelman Change and Employee Engagement
also listed understanding customer preferences and needs as their top concern, even over
pay and benefits. However, when the company looked at the priority it had placed on
employee engagement programs at the retail level, most of it was operational, focused
on health and welfare benefits or pushing internal news. Employee passion about making
a difference in their local communities and with customers was, in this case, the biggest
untapped opportunity to drive greater employee engagement and connection with the
brand and the business. The company has since reoriented the ownership of employee
engagement among HR, Internal Communications and Store Operations, and started
creating a program and a set of tools to help employees become change agents in their
local communities and deepen their knowledge of the company’s sustainable supply chain
and its value to customers in the stores.
Example: Organizing for Action
Fresh off a restructuring and cost-effectiveness initiative, a global consumer goods
company needed to re-orient leaders and employees to a unified strategy emphasizing
market prioritization and increased customer-centricity and innovation. The new strategy
would require leaders and managers to
understand and incorporate the impact of
the competitive environment and consumer
preferences on everyday decisions on
investments, priorities, resources and staffing.
However, the company had no infrastructure
in place to drive the new conversation and
thinking required to change decision-making
and actions by leaders in concert with a new,
five-year strategy. To begin the dialogue,
the company segmented their leadership
into top 100, top 1,000 and top 5,000 people
managers, and created a targeted strategy for
communications, involvement and two-way
feedback for each group. Ultimately, they
implemented a monthly and quarterly cadence
for communications that has served as an
essential building block for strategy execution,
and have shown measurable improvement
on employee engagement and awareness
according to their annual survey.
5

7. Edelman Change and Employee Engagement
LEADERSHIP EFFECTIVENESS AND EMPLOYEE ENGAGEMENT
Time and again, research has shown that the relationship with one’s direct manager is a top
driver of employee retention and engagement. An individual employee’s motivation to grow
beyond a minimal set of performance expectations is directly due to the style, behaviors,
recognition, consistency, and authenticity of his/her leader. Employees look to their
leaders for context, direction and inspiration. However, more often than not, companies’
employee engagement efforts are driven by HR and focused on tangible components of the
employee experience – things like pay, benefits, recognition and tactical communications.
To truly make a difference, companies should spend their resources and energy developing
programs and opportunities to strengthen and engage leaders. Simply put, engaged
leaders create engaged employees, who in turn generate above average performance.
Example: Engaging Leaders to Drive Revenue Growth by Decreasing Employee Turnover
Following a management change at a major U.S. car retailer, the company’s leadership
team embarked on a face-to-face tour to meet with every general manager from its 150+
dealerships nationwide. At each stop, the CEO, COO and the head of the local region –
laid out a plan to grow the business despite an incredibly challenging economy. The senior
team’s deep involvement at this level met a key ground rule for increasing employee
engagement: Make It Important!
6

8. Edelman Change and Employee Engagement
Leaders had identified a somewhat unlikely driver of the targeted growth: reducing
employee turnover. The company closely tracks engagement, retention, customer
satisfaction and financial performance for each dealership; in reviewing this data, leaders
observed that the higher the churn rate, the less successful a dealership was in training
employees to run operations smoothly and provide the excellent customer service that
differentiated the company from competitors. In fact, they were able to determine that sales
improved to the tune of $400 per month in gross profit per associate when retention and
engagement improved at a certain location. Leaders shared this data with managers
and tasked them each with reducing their location’s turnover by nearly half. They offered
specific, actionable ways to do that, including sharing information, taking genuine interest
in employees’ development, implementing staff’s suggestions for improving operations and
empowering employees to resolve customer issues on the spot.
Example: Changing the Dialogue, Redefining Leadership
Despite its well-respected brand name and long-standing presence in the market, a leading
lawn and garden products company realized it could no longer survive and grow by doing
things the way they’d always been done. Led by a CEO determined to secure the
company’s future success, the company built a leadership development program designed
to drive real culture change. After all, building a culture that embraced change, innovation
and creative thinking would require a new way of thinking and a different type of leader.
Focusing its resources on the top 100 leaders in the organization, the company introduced
a yearlong speaker series. The series featured prominent speakers from a variety of
business industries, academics and even the military. In their discussions, these outside
leaders would speak about their own successes and failures in areas all companies can
relate to, like leadership, customer service, cultural change, innovation and sustainability.
Their experiences inspired a new way of thinking and the courage to try new approaches
to drive real and lasting culture change.
Following each presentation, leaders would come together to re-examine their own
business plans and priorities – rethinking them through the lens of what was just discussed.
As a result, they were inspired to think differently about their day-to-day work, long-term
priorities and overall leadership style. The organization has become increasingly energized
and excited about the future, and leaders’ new way of thinking and innovating has shaped
the employee experience at all levels of the organization. As leaders explore topics and
issues they’ve never discussed before, the entire culture is shifting in a new direction.
7

9. Edelman Change and Employee Engagement
REALITY CHECK
Rethinking employee engagement to drive new results isn’t easy, especially when
there are many competing definitions and approaches. Yet, given our tough business
environment, the bar is now exponentially raised for employee engagement and leadership
communications and effectiveness. Is your organization ready to address this reality?
Consider the following:
1. Is your leadership rolling out a new strategy or initiative that will require more
engagement than ever from your employees?
2. Do you need to activate or re-engage your employees as advocates or
ambassadors?
3. How well is the urgency for change understood and acted on within your
organization?
4. Should leadership communication be a critical component of delivering on your
company’s strategy or organizational performance goals in the next 1 to 3 years?
5. Are you searching for novel ways to renew or reinvent the employee experience?
Are leaders looking for better ways of engaging their teams?
6. Does your employee engagement research provide sufficient insights for leaders
to build trust, cultivate two-way dialogue and engage employees on critical priorities?
7. Do your current drivers of employee engagement support the business you need
to become?
8. If employee engagement remains at its current level or decreases within your company,
is there a downside risk?
HAVE YOU EVER SEEN A BRAND AMBASSADOR?
Contrary to popular belief within corporate circles, according to the organizations
we spoke with and studied, the concept of brand ambassadors among employees
is largely a myth. People decide when, what, where, how and why they promote
or discuss their employer. The best organizations can do is to provide timely,
relevant information and stories that characterize the value and efficacy of brands,
products, and services. More importantly, leaders must foster an open and
respectful work environment where employees are heard, recognized, rewarded
and engaged in the business. Doing so increases one’s chances of having
people talk positively and frequently to others about the organization.
Remember, labeling or branding someone as an “ambassador” is the first step to
derailing the effort. Rather, allow the process to happen naturally, organically and
focus on content, context, accessibility and feedback. The , have the confidence
to be subjective about results.
8

10. Edelman Change and Employee Engagement
A BEGINNING ROADMAP: RETHINKING EMPLOYEE ENGAGEMENT
Unlocking human potential is truly the most sustainable competitive advantage for
companies in today’s global marketplace. Developing the right formula – one that involves
leadership, HR and communications – can help ensure that you are recruiting and
retaining the talent necessary to succeed, if not survive.
A one-size-fits-all approach will not work, so you should begin by building a better
understanding of your current situation. This includes evaluating your current employee
research, identifying the drivers of engagement for your organization and defining
your employees’ world view – how they view your business and their role in it, how
they consume media inside and outside work, what their top-of-mind concerns are, who
they view as credible sources and how well they are positioned to be ambassadors for
the company. With a solid understanding of these areas, you can begin to establish a
strategy to strengthen employee engagement within your organization.
EDELMAN CHANGE
AND EMPLOYEE
ENGAGEMENT is the global
organizational (internal)
change communications
consulting group of
Edelman, the largest
independent public relations
firm in the world and the
third largest overall. The
group provides distinctive
expertise in organizational
effectiveness, culture
transformation, strategy
implementation and
accessibility, CEO transition
and positioning, internal
branding, post-merger
integration, labor-
management relations,
internal communications
programming and
research/measurement.
For more information,
please visit our team web
site and blog at:
Engagement is about Experience….Experience is about Relationships….Relationships are http://change.edelman.com.
about Communications….Communications is about Relevance….Relevance is about
Respect….Respect is about Trust
9