As a Rhythm consultant, I work with many clients to help them develop their KPI’s and Critical Numbers. One of the goals is to have two or three KPI’s that monitor employee health and a Critical Number that focuses on the people/relationship side of the business. I get many requests to provide examples of these indicators, as most organizations do not think about this naturally. We tend to focus on revenue, profits and operational aspects of the business, often forgetting to track the health of the relationships that impact our business.
To develop the right KPIs,
we start by asking, “what is the business problem we are trying to solve?” or “what area of the business are we trying to improve?” The answer to these questions should provide us with the lagging or results indicator we are looking for. Results are important and worth monitoring, but Leading Indicators are much more powerful and allow us to make adjustments to reach our goals. To proactively manage change, we need to peel back the onion and ask why, what or how four or five times to get to the Leading Indicator we are looking for.
This brings me to the topic of this blog. It is more important than ever that our employees are enthusiastic and engaged when they are at work. A recent survey by the Gallup organization found that only 28% of American workers are engaged in their work, meaning that they are passionately involved in it. Another 54% are not engaged and sleepwalking through the day, and 18% are disengaged completely. Economic conditions of the last few years have a lot to do with this, as does how we treat and manage employees. The individual reasons and circumstances for disengagement are different in every company but equally important to understand and address. To execute effectively and harness the energy in our organizations, we need to dig deep and determine which levers to pay attention to and drive improvements on. Employee health and productivity are an integral part of the business strategy. As Jim Collins says, people first, strategy second. The key is nurturing the most important asset the company has, for real, not just in a casual statement.
Therefore, the goal is to develop and implement the right KPI’s that pay attention to our most important asset, our people. By creating and fostering the right culture and environment for people to flourish, we move closer to full engagement.
Let’s look at a few examples:
One company I am working with is seasonal in nature and employee burnout/discontent is a big issue six months of the year. We started asking the questions: why are people leaving the company, why has tardiness and absenteeism increased, why has morale dropped. After discussing the answers to many of these questions, we determined it is because employees are working too many hours and too many days without a break. Employees need rest and recovery time to be fully engaged while they are at work. We discussed adding a Leading Indicator to track planned overtime, so that we could monitor and schedule accordingly to provide the necessary rest time for employees.
Another company had been growing, but faced a lot of internal quality and delivery problems. They were hiring people rapidly to manage the growth, but process issues intensified and on time delivery and quality to customers declined. At first, KPI’s were used to monitor quality and delivery, but this did not address the core issue. As we peeled the onion back, we realized the issues were stemming from the people they were hiring. Even though the screening and interview process was thorough, they were still hiring people that were not well suited for the positions. I subscribe that there are no bad people and that there is the optimum position for everyone, we just need to define the requirements and hire to meet the needs of the positions we are filling while putting the best candidates in these roles. We determined that we needed to develop job scorecards for the positions to better define the requirements and to commit to hiring “A Players” for each open position. This lead us to develop two Leading Indicators: number of Job Scorecards created and number of “A players” hired each quarter.
By defining the right leading people indicators in both examples above, the companies made great progress in their execution while improving employee engagement. I once read that wouldn’t it be great if people were as passionate and engaged at work as they are when at home while focusing on their hobbies. This statement really resonated with me and supports the effort to define the right Leading Indicators to effectively hire, grow, and nurture your employees to achieve full engagement on the job.
Look around your organization and ask yourself “how engaged are your employees?” Then start asking the other mangers their opinions. Next, begin the process to discover what needs to be improved and what results you are looking for. Use the “5 Why” exercise to develop your Leading Indicators that will put you on the path of full engagement.
Please let me know your thoughts and how you have succeeded in improving your employee engagement.
Execute well, Alan
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