Employee engagement, aisle 4

It’s a simple equation: Happy employees plus happy customers equals higher sales
By Sarah Dobson
|hrreporter.com|Last Updated: 07/18/2014

Is there truly a link between employee engagement and customer sales? Cara Operations certainly thinks so.

The 27,800-employee restaurant chain has done a correlation between its bi-annual employee engagement survey in regards to the overall guest experience and the satisfaction of guests, in addition to the profitability for each restaurant, said Heather Wyllie, director of people development at Cara, which counts Swiss Chalet, Harvey’s, Milestones and Montana’s Cookhouse among its properties.

“And if you looked at the top quartile, the highest engaged associates had the highest guest satisfaction and also the highest profitability,” said Wyllie. “And when we looked at our lowest quartile, the results were uncanny — it was the same thing. So the correlation was really helpful for us to really influence the franchise partners in the bottom quartile to really elevate the associate experience because, ultimately, it was proving to drive profitability in our top-quartile performers.

“It has been a real eye-opener for our non-complying franchise partners.”

Wyllie shared her story at a Canadian HR Reporter roundtable on the link between employee engagement and the customer experience, held in partnership with Aimia and moderated by managing editor Todd Humber.

Delta Hotels and Resorts, which does an annual engagement survey with its 6,000 employees, has found a clear link between

employee engagement scores and guest satisfaction scores, said David Bird, senior vice-president of operations.

“Almost certainly there are other business metrics that are not in line with where we want to be, and guest services is one of those ones. So we believe firmly that healthy and happy employees drive guest service which, in turn, drives profit. So that’s really how we tie it back to the outcomes,” he said. “We know if we improve on employee satisfaction, we’ll improve on guest satisfaction as well.”

After an employee survey, Shoppers Dug Mart identified an opportunity to enhance both the bottom line and employee engagement — through technology, according to Tammy Van Eck, director of human resources business partnering. Year over year, the score around the question “I have tools and resources needed to be productive at work” was low compared to the industry benchmark, and the company wasn’t gaining any traction, said Van Eck.

So the retailer — which has 1,400 central office workers and 50,000 retail employees (under associate owners) — looked at the tools it offered them and decided it wasn’t leading-edge. It started a project called Going Mobile in which it rolled out a wireless, bring-your-own-device program with access to Google email and filing, along with a cloud-based Internet. Now, workers can access the information they need while on the shop floor, she said.

“It’s been phenomenal,” said Van Eck. “By opening up these… streams of work, employees were just delighted that they could now be so productive.”

A pulse survey rolled out after the project saw a 21-point lift in productivity around this particular question, so that will hit the bottom line, she said.

But sometimes it has less to do with engagement and more to do with empowerment, said David Wexler, former vice-president of human resources at FreshBooks, which has 145 employees.

“The people who serve our customers are fully empowered to do whatever it takes to make the customer happy. By being

fully empowered, it means the buck really stops with them. And when you are empowered, great things happen — you are able to serve the customer without seeking approval from someone else, you are able to innovate in terms of what it is that you are doing to help solve the customer’s problem and you’re able to bring in other resources in the company that can help that customer as well.”

It’s about building relationships, said Ian Hendry, vice-president of human resources and administration at Interac and president of the Strategic Capability Network. In financial services, for example, if people are measured on cross-selling more products, customers might feel coerced. However, if the bank teller is merely imparting her knowledge, that changes the nature of the transaction. It becomes more of a partnership, based upon mutual respect, he said.

“There is a connection that’s made and there’s a skill to that.”

The challenge becomes how do you drive results, which means pushing people to do more, said Hendry.

“At what point do you dissatisfy your employees because you’re driving for performance? There’s a fine line between the two and that’s a bit of an art and so your ability to do that in large organization is really tough to do,” he said. “You can always create a burning platform that energizes people over the short haul but… it’s absolutely a long haul. When it becomes same old, same old, then what are you doing to stimulate the performance you’re looking for?”

Measuring engagement

While annual, bi-annual or pulse surveys are still popular with employers when it comes to measuring employee engagement, there are other proxy forms that may be even more important, according to Wexler, such as revenue and profitability per employee.

“If you are generating higher revenues, and higher profits per employee, then there’s an association with employees being more engaged.”

FreshBooks also looked at numbers around regretted turnover, he said.

“Not all people who leave you are necessarily a loss but when you’re losing individuals who are performing and who choose to leave you, that’s sending a very clear message that there are issues with regards to engagement, amongst other things.”

If you look at any one score or measure in isolation, there is a risk you’re measuring the wrong thing, said Wexler.

“But when you couple revenue per employee, for example, with regretted turnover, if your regretted turnover is low and your

revenue per employee is increasing, then that suggests that you’re actually doing things to help your bottom line that are healthy for the individual in an organizational perspective.”

There can be confusion between engagement and productivity, said Hendry. Engagement scores may be linked to line scores for managers, but that can become a popularity contest, he said.

“We have to think a little deeper about what engagement means and how that links to productivity.”

Leadership’s role

When it comes to changing those scores, and boosting engagement, employers have a variety of tactics. For one, it’s key to combat skepticism by responding to the survey results, said Van Eck.

“The worst thing that anyone can do is to survey employees and then not show action. That certainly can erode results, so we’ve put a big focus on having those engagement action plans and actually reporting out on an annual basis: ‘What did we do? We’ve heard you and this is what we’ve done.’”

At Shoppers, there are three recurring themes that come up: recognition, career development and performance management, said Van Eck.

“If you think about those, they’re typically tied to leadership effectiveness. So one of our big areas of focus is on developing our leaders to make sure they’re strong in these areas.”

When it comes to restaurants, leadership is critical, said Wyllie.

“You have to be present every day and on your game or on stage to demonstrate to your associates how committed you are and how happy you are that they’re there because, ultimately, the impact is on our guests,” she said. “Actively leading every single day is something that we inspire our franchise partners to do, and we talk about it endlessly — at conferences and town halls and in our communications — to reinforce those behaviours time and time again.”

Another piece that really encourages the non-believers has been thank-you cards from senior leaders, said Wyllie, which are sent to associates after positive feedback from customers.

“The feedback we get from those associates that are getting those cards is phenomenal, and for something so simple, that has such a significant impact has been amazing for us.”

Leadership is a foundational part of engagement, said Jennifer Trant, general manager of financial services at Aimia.

“Having leaders really role-model behaviour that they’re looking for from the employee population is huge.”

Boosting — or killing — engagement

Pride can also help with engagement, be it pride in your job, your leaders or the brand, said Wexler. Meaningful work is also

important to employees, said Trant. Bird agreed: “It’s also the ability to influence and effect change within your sphere of influence,” he said. “The compensation has to be in line and appropriate, but what really drives engagement is being involved and having some control over the work that’s being done.”

It’s also important to deal with the elephants in the room, said Wexler.

“Nothing kills employee engagement faster than where employees see and talk about something that is wrong — it can be an individual who has a toxic nature, it can be an individual who is not upholding the core values of the organization, it can be an individual, frankly, who is doing something criminal and that activity is allowed to continue. Because what it then says to the organization or parts of the organization is leaders are not walking the talk.”

On the flipside, one of the ways to really help build engagement is honest, frank and transparent communication, said Wexler

“When you try to hide things, when you try to paint a rosy

picture when there are issues that have to be addressed, employees are too intelligent and too connected to not be talking with one another and not be thinking about what the reality is. It’s better to be honest and share the news — good, bad or indifferent.”

And there’s not necessarily a one-size-fits-all solution — different issues such as silos, language or behaviours can impact

engagement, said Hendry.

“So if the top of the house doesn’t behave the way it should and provide the leadership, then people won’t follow,” he said. “One program doesn’t fit all so it’s the tweaks that you do and all the associated things that go with it that ultimately drive engagement.”

That’s apparent when it comes to tolerance for perceived bad behaviour, said Wexler.

“Certainly I find that amongst certain generations, they are much quicker to exit should the organization not live up to their expectations. What is says is that the bar is actually getting raised higher and higher in terms of employee expectations around behaviours.”

But in having done a discovery last year to come up with a culture statement with a group of associates from across Cara — young, old, seasoned, new — it became apparent there were foundational similarities, said Wyllie. People want to know what they’re held responsible for, they want frequent, transparent communications and they want to be held accountable.

“Those are the foundational pieces,” she said.

It’s also important to let employees know where the company is headed, what the strategic plan is, said Bird.

“To drive engagement, there’s that core value piece that needs to be in sync with who you are, but also the understanding of what is the bigger picture… what are we trying to do. When you do have changes, when you do have things that move around throughout the year, people understand how that connects back to the strategic plan,” he said.

“It comes back to the integrity of leadership and if you start with that foundation of trust and belief that the leaders that they are working with are actually acting in the best interest of the company and the plan, then you start with great foundation. And when we do have missteps, we can honestly say, ‘Oops, that didn’t go the way we had planned,’ course-correct and people will say, ‘OK, got it, understood, we all make mistakes… if you’ve got underlying integrity and trust, I think people will accept that there’s a misstep once and awhile.”

It’s good to show vulnerability, that builds trust too, said Wyllie.

“We do make mistakes all the time as a leadership team so course-correcting and declaring, ‘Yeah, we screwed up’ and righting a wrong is OK — that drives engagement versus ignoring it or not doing anything about it.”

One bad apple can spoil the bunch

But can one bad manager ruin employee engagement?

What’s important is the culture and foundation, and then living and acting upon that, said Bird.

“And when you do run into that bad manager and that leader that clearly is not aligned, that you act quickly on it and you don’t let the problem sit there and fester because that will kill employee engagement when they start to see, ‘OK, well we’ve got the plaque on the wall that says this but we’re not living to that’ and when we’ve got leaders that aren’t aligned to that and we don’t do anything about it.”

The challenge is getting the bad behaviour to bubble up and become

evident, said Hendry.

“When it’s blatant, it’s easy to deal with, it’s really easy. Most of it isn’t — it’s very subtle and to identify those who play that game is a difficult thing to do.”

At Cara, the biggest struggle is with business owners, said Wyllie.

“We can’t actually force them to behave in ways that are remarkable and demonstrate exceptional leadership, so that’s a big struggle for us and it is a gap for us.”

The company has worked to build an accountability model that holds the franchise partners accountable to specific areas, such as food safety, she said, but Cara doesn’t have that same accountability when it comes to how employees are treated.

“The leader has to declare it’s non-negotiable, so the way we treat our people internally has to be as exceptional as the way we treat our guests or the way we’re meant to treat our guests… That’s a big process that requires a long journey but if we can do it and get there, then we’ll set an example, for one, and then hopefully others will learn from that. But we’re so far from that right now because they own their own business. It’s very challenging.”

It’s similar for Shoppers Drug Mart, said Van Eck, as HR can only influence, encourage and provide the tools.

“At the end of the day it’s their decision,” she said. “But we’ve found that, over the years, as they saw the results of that higher engagement and the impact it can have on their bottom line, they began to buy into it. And now it’s almost become a little bit of a contest sort of between the stores and the VP of operations to see who’s at what levels because those results get shared, so it’s definitely got traction.”

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