By John Wright

Enron, Lehman Brothers, SNC-Lavalin, XL Foods, UBS Libor—it seems that every other day brings another scandal. Is it any wonder that the public’s trust in organizations is eroding? Add to that an environment of ‘permanent white water’ with downsizing and economic uncertainty and there is a ‘perfect storm’ in our workplace. So how does the level of trust and confidence in senior leadership affect employees, engagement – and ultimately an organization’s performance?

As a company whose mission is ‘to develop the next generation of leaders to thrive in tomorrow’s marketplace’, Canadian Management Centre set out to uncover the true state of employee engagement by providing the first comprehensive view of both the Canadian workforce and HR professionals and to identify the levers that factually drive employee engagement.  We partnered with Ipsos-Reid, one of the world’s leading survey-based marketing research firms to undertake a national study appropriately titled, “Build a Better Workplace: Employee Engagement Edition”. (View an infographic of the research highlights.)

The catalyst for this research initiative was to change the dynamics of the discussion from theory to facts, and from observation to action. We wanted to confirm the drivers of engagement that matter most to Canadian employees and to identify a proven set of activities organizations should focus their limited resources on to improve their engagement scores with certainty.

Defining Engagement’s Impact

The research proffered a definition of engagement beyond mere satisfaction with one’s job. Our definition of employee engagement is “an emotional and intellectual connection with your company and with your customers.”  At the core of this research is an empirical model that helps organizations understand where to focus in order to create a culture where employees thrive and business prospers.   We know that when employees are truly engaged, they:

• Volunteer their hearts and minds to the organization;
• Understand how their contributions fit into the vision of the organization;
• Are committed, passionate, and inspired about their work;
• Care about the future of the organization and are willing to invest time and effort to ensure their team and the organization succeeds;
• Remain loyal to the organization – even in difficult times; and
• Are willing to go above and beyond as a standard practice, or as we like to say, “they outperform.”

Key Study Findings

The “Build a Better Workplace” study was conducted in August 2012 and included 1,200 working Canadians from more than 500 companies (with more than 100 employees), across 25 diverse sectors. We also ran a parallel study of almost 500 HR professionals—a first time in Canada. The research looked at the level of engagement among employees and HR professionals, by industry sector, across generations, and by region. Alarming results were discovered regarding confidence in senior leadership, and perhaps most importantly, trust in senior leadership.

Among the key findings:

• Sixty-one per cent of Canadian employees don’t trust their senior leaders.
• Fewer than four in 10 Canadian employees feel their leader does a good job communicating what’s happening in their workplace.  Across Canada, Albertans are the most satisfied (41 per cent) followed by Quebec (39 per cent), BC and Ontario (38 per cent). Employees in Manitoba and Saskatchewan report the lowest figures at 35 per cent.
• Less than half (44 per cent) of Canadian employees have confidence in the senior leadership of their organization. The highest confidence ratings for senior leaders were reported in Manitoba and Saskatchewan at 48 per cent and lowest in BC and Atlantic Canada at 43 per cent.
• Only 27 per cent of employees are highly engaged and one in five are not engaged at all.  BC and Alberta lead our country with the highest proportion of highly engaged employees at 33 per cent.

Industry Responses Vary

When we compared feedback across industries, the results varied considerably:

• The highest level of confidence in senior leadership was reported by employees in high tech/IT at 55 per cent. By comparison, those in transportation (32 per cent), government (35 per cent) and retail industries (39 per cent) reported the lowest levels of confidence in their senior leadership.
• Only 46 per cent of Canadian employees are satisfied with internal communications; HR experts share this view at 49 per cent. By industry, transportation reported the lowest scores at 26 per cent, whereas financial services (53 per cent) and education (52 per cent) reported the most satisfaction with internal communications.

Generational Differences

The results also showed a generational divide in the workplace regarding confidence in senior leadership:

• Gen Y (18-31) and Traditionalists (67+) reported a respective 49 per cent and 50 per cent approval rating.
• Baby Boomers (48-66) were third at 44 per cent.
• Gen X (32-47) reported the lowest confidence for senior leadership at 38 per cent.

On the issue of engagement only 24 per cent of Gen Y and 22 per cent of Gen X employees say they are highly engaged, compared to 29 per cent of Baby Boomers and 49 per cent of Traditionalists.  This gap in scores demonstrates that improving engagement in the workplace is challenging and a ‘one size fits all’ solution is not enough.  Special attention must be given to understanding the needs of our diverse workforce.

How HR Views Things Differently

The research also provided unique insights into the views of HR professionals compared to employees. The perspective of this group was generally more favourable than employees.  When presented with the statement, “I trust what senior leaders say,” 50 per cent of HR professionals agreed versus only 39 per cent of employees.  Similarly, more than half (55 per cent) of HR professionals agreed with the statement, “I have confidence in the senior leadership of my workplace” versus 44 per cent of employees. On the issue of organizational alignment, 80 per cent of HR professionals say they ‘…understand the relationship with their organization and the objectives of the organization’, compared to 66 per cent of employees.

As strategic partners to senior leaders, having access to more corporate information contributes to HR’s more favourable view; at the same time underscores the power of effective communication.

Managing A Downward Trend

We knew going into the research that trust and confidence with leaders was a concern in Canada, but the findings surprised even the researchers because they showed a disturbing downward trend.  This should be a wake-up call to senior leaders and HR professionals that their past efforts to improve perceptions of leaders have not been effective.

However, the good news, is that it is never too late to address employee engagement. Managers as leaders have the broadest reach in organizations and can play a powerful role in creating a positive culture of engagement. They can be enabled through training to build trusting relationships with employees—to empower them to achieve higher levels of performance that will directly drive organizational results.

Fixing the Bigger Picture
Based on the results of this research, what can be done to address these findings in the workplace? Specifically related to senior leadership, there are three areas where organizations can best focus time and attention with the greatest impact: Integration, Transparency and Connection.

I. Integration—Awareness and understanding of the big picture.
Employees feel they don’t have visibility to business priorities and want to know if they are working on the right things. Here are three easy-to-implement solutions.
Business plans don’t need to be overly complicated and most should be shared with employees.
Performance management needs to be tied to organizational priorities and should flex and re-calibrate as priorities change through the year.
Leaders must help employees understand how they fit in and how their contributions make a difference.

II. Transparency—Improving the flow and frequency of communications.
Employees often feel they are out of the loop and they are not involved in decisions that impact them.  The following tips address this challenge, and how to avoid communication bottlenecks.

• Business status updates should connect back to the business plan to ensure information is integrated into day-to-day activities.
• Senior leaders should enlist the support of front-line leaders and HR professionals to improve the “up and down” flow of communication.
• Be transparent—especially during times of change and increase frequency of communication!
• Don’t just push information—you also need to pull. Ask for input from employees and provide context to key messages such as why ideas and suggestions are adopted or not.
• Connect with employees more frequently and informally. Our research showed that employees across all age groups want personal interactions and that social media tools are not as ideal or popular as their attention in the media might suggest.

III. Connection—Closing the gap on perceived distance.
Employees feel disconnected from senior leaders and they may also feel that leaders are out of touch with them and their customers. Part of the problem is that employees may only see their senior leaders once a year as part of a business update.  So what can organizations do to address this gap?

• Humanize senior leaders by enabling informal access. This will vary in different organizations, depending on the culture; there should be fun and informal ways to get to know senior leaders as people – and not just titles.
• Senior leaders need to get into the “trenches” from time to time. Leaders need to take time to develop authentic relationships with employees by connecting to their daily reality.
• Consider a “Manager Once Removed” approach where your employees have the opportunity to meet with their manager’s boss once or twice a year.

Building a Model Workplace

The results of the “Build a Better Workplace” research have enabled us to create a predictive model that simulates the impact of specific actions on employee engagement, helping organizations understand the combination of forces that drive engagement. The model combined with the “Build A Better Workplace” report is an effective toolkit that guides organizations on how to harness each aspect of engagement (involvement, alignment, satisfaction and loyalty) and how to channel change through senior leaders, managers and communications.

For the first time, organizations can plan with certainty how to measure, manage and anticipate expected shifts in their employee engagement levels. This allows you to focus on the ‘right things’ that will truly influence engagement in your organization and ultimately give your organization the edge in the market place with products and service.

Here’s what we know for sure about employees and engagement:

• Employees have to trust. A lack of trust in business leaders impacts employees’ ability to connect with their hearts and minds in the workplace.
• Employees need alignment to business priorities. They need to know they are working on the right things.
• Employees need to know they are making a difference. They derive satisfaction from knowing their contributions are valued.
• Employees want to be involved. They want to be asked for their input especially on matters that impact them.

It is well documented that successful organizations that outperform in their marketplace have highly engaged workforces.  These employees outperform because they are aligned to the strategic priorities of the organization. They outperform because they are enabled by the leaders in their organization.  They outperform because they are set up to make a meaningful contribution.  A work environment that inspires trust and confidence in senior leaders will set the foundation for a culture of elevated engagement that will propel your employees to outperform.

For more information on the report or to see a demonstration of this engagement model please contact us at engagement@cmcoutperform.com.

John Wright is the President and Managing Director of Canadian Management Centre, based in Toronto.