Why Companies Can’t Prove The Value Of Employee Engagement

challenge, difficulty, struggle

In a perfect world, it would be important for companies that invest in anything to be able to evaluate whether that investment returns value to the company. Companies evaluate their marketing strategies, in terms of business results, assessing different channels, ad types and so on, since obviously, they don’t want to endlessly spend money on things that don’t work. And in many respects it IS possible to do that in advertising.

The same principle applies to employee engagement efforts. Or at least, that’s the ideal. Unless companies can determine whether they have received BUSINESS benefits from their efforts, there’s no “brake” on continuing. There’s no data available to dis-confirm or disprove the hypothesis that better engagement leads to better results and so companies will continue to divert resources into their EE efforts.

Why It’s Impossible To Prove Employee Engagement Efforts Have No Value

In the real world, it’s very difficult, in fact almost impossible to evaluate the effects of any corporate program in “soft skills”. This applies to other things, like training staff, or changing how one recruits.

You can measure indicators, like employee retention. That’s not hard. However to forge the link between any one single corporate initiative and bottom line business results, is almost impossible.

To evaluate the effects of employee engagement initiatives on business outcomes, you need to establish the CAUSAL link between that initiative and those business outcomes. In laboratory research in science, you can use research designs to prove or disprove a relationship. For example, you can use control groups, to see if the group that received the “initiative” changed in a way that the control group didn’t.

Another way of proving a causal relationship is to use what’s called an ABAB design. You apply your “initiative” to a group of people, observe the outcomes, then reverse the initiative to see if the outcomes go back to what existed before the initiative. Then you can repeat. That can provide more direct (but imperfect evidence) about the causal relationship between the initiative and the outcomes.

That’s in a controlled environment where you can change ONE variable at a time, and you can’t do that in the real world. Neither will companies be willing to do this kind of research, because they are less interested in establishing cause-effect relationships than they are in their bottom line business results. Companies are NOT labs.

The upshot is that:

The real world is complex, so complex that it is close to impossible to assess whether a particular employee engagement initiative results in better business results.

So What Do Companies Do Instead To Evaluate Their EE Success?

Rather than evaluating whether their EE intiatives actually impact on bottom line business numbers, they look at a more limited issue: whether the initiative actually improves employee engagement AS MEASURED BY EMPLOYEE SURVEYS.

If quarter by quarter, companies see engagement SCORES rise, they conclude that they are making progress, and going in the right direction, and continue the path, EVEN THOUGH THEY HAVE NO EVIDENCE about whether those scores are translating into employee actions that add to the bottom line.

Raising the SURVEY SCORES becomes the end goal, rather than business results because it’s easy to get survey scores, and it’s impossible to evaluate their impact on the bottom line.

The survey scores become the END, rather than the means to reach the really important stuff — better business results.

Conclusion And Implications

Many causal links go uninvestigated in companies because it can be impossible to prove or disprove causal links. Employment Engagement is not the only intervention that suffers from this.

Since the idea of employee engagement is so “intuitive” and common sense like, in the absence of data to show its value or worthlessness, companies will tend to continue spending money and allocating resources on the basis of FAITH and BELIEF, not data. Much of company investments in EE are based on FAITH, not data.

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