Best employers: When the going gets tough

If “cut, cut, cut” was the corporate mantra throughout the recession, then 2011 is shaping up as the year of “what now?” The economy can’t seem to shake its volatility. Markets soar one day and plummet the next, rattled by contradictory news of job gains, consumer confidence, and how Europe is handling its debt crisis. One minute we’re on the road to recovery, the next, it seems, the cusp of a depression. Amid the instability, companies must decide how to conduct business: to hire or remain lean, invest in resources or keep costs low. Another headache is a growing us-versus-them sentiment dividing employers from employees after a recession that brought layoffs, salary freezes and increased workloads.

Yet the employer-employee relationship is obviously symbiotic. And those companies that spend time creating an environment in which each side serves the other are best positioned to ease the animosity and ride out the uncertainty. Aon Hewitt Inc., the global HR consulting firm that annually identifies Canada’s Best Employers (page 60), specializes in identifying these top firms.

In their annual survey identifying the country’s 50 top employers, Aon Hewitt measures employee engagement. “It assesses to what degree people are intellectually and emotionally connected to their job,” explains Neil Crawford, principal at Aon Hewitt—basically, which employees like going to work in the morning. Crawford and his team analyzed surveys which asked employees to rate how strongly they either agreed or disagreed with six statements, including: “This organization inspires me to do my best work every day,” or “I would not hesitate to recommend this organization to a friend.” They also measure what matters most to employees: pay, work environment and recognition. This year, Canada’s top 50 employers achieved high scores—consistent with levels of employee engagement they attained prior to the recession. So in this climate of uncertainty, just how are these companies keeping their office environments running smoothly? Tyson Matheson, a WestJet vice president has a few ideas.

WestJet achieved an engagement score of 85 per cent. That’s not only well above the Canadian average of 63 per cent, it’s also in the face of a shaky airline industry vulnerable to ongoing swings in oil prices and consumer spending. For starters, the company is known for great perks: everything from an on-site fitness centre to travel discounts to sunlit cubicles. And, since the firm, headquartered in Calgary, is known as a low-cost carrier, it is better positioned than other airlines to handle economic downturns, which helps quell staff anxiety over job losses (WestJet has never experienced layoffs). Matheson also ties their success to a three-part hiring process that nets people who fit especially well into the company’s culture, regular open communication, and a close-knit environment. West Jet president Gregg Saretsy, he notes, eats in the lunchroom with everyone else. “Once you have a strong culture in place you can weather any economy,” says Matheson.

This high level of engagement has translated into real benefits: WestJet has a low turnover rate, and manages to attract top talent despite the fact that nearby oil-and-gas companies can offer more lucrative compensation; and its staff—82 per cent of whom reported enjoying their daily tasks—rarely miss a day. “We have an absenteeism rate that other companies would pay big money for,” says Matheson.

While WestJet has found its formula to keep staff satisfied and working hard, other companies are struggling. Concepts like “communication” and “strong culture” are subjective and can be implemented in drastically different—and sometimes terrible—ways. How does “engagement” actually get translated into everyday practice? That’s what Harvard Business School professor Teresa Amabile and psychologist Steven Kramer sought to find out in their new book The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity At Work. They analyzed electronic daily diaries from 238 people doing innovative work in seven companies, looking for the triggers—and inhibitors—of engagement. Making progress on a task that day, however trivial, was the number one source of engagement. Amabile relates the entry of a software engineer who finally solved a system glitch that had been haunting him: “I smashed that bug today,” he wrote. “That may not be an event to you, but I have a very drab life and I am rejoicing in my solitary smugness.” His engagement scores, says Amabile, were off the charts. She also notes that on the days when employees felt most engaged, they were far more likely to come up with new ideas or solve complex problems.

Managers, however, rated “making progress” last on a list of engagement drivers, the authors found. “They are completely missing the boat,” says Amabile. Over one-third of the diary entries, she reports, revealed high levels of disengagement among the employees. The main causes? Micromanaging, or lack of autonomy, and a failure of management to communicate clear goals. Both seriously inhibited daily progress, and thereby engagement. “They need to communicate that their employee has to climb Mount Everest,” says Amabile, “then provide them the autonomy to choose their own route.”

For a company like pharmaceutical powerhouse GlaxoSmithKline Canada, another employer that made the Best Employers list, stating clear goals is key to success, says vice-president Tracy Lapointe. “Everyone knows where they fit in and what’s expected.” That allows managers to provide the autonomy employees need to make progress. She also points to GlaxoSmith- Kline’s “Applause Program,” which recognizes employee accomplishments. It might seem trivial, but in Aon Hewitt’s survey, just 48 per cent felt they received adequate recognition. Only feelings about pay fared worse. Programs like these, or opportunities that allow employees to volunteer during the workday, cost little to implement, but boost satisfaction. Ultimately, say experts, most employees are looking to feel appreciated and to have opportunities for advancement and growth.

But as companies strive to improve staff investment in their work, it’s worth noting that employee engagement can have its pitfalls, especially in a downturn. Thomas Britt, psychology professor at Clemson University in South Carolina, explains that in a poor economy, as companies operate with reduced resources and fewer staff, managers tend to concentrate on propping up their least engaged workers—thinking last about supporting their highly motivated employees. However, as their best employees increase their workload and encounter difficulty completing tasks as a result of restricted resources, they’re the ones more prone to increased frustration. “If those obstacles to achievement become chronic,” says Britt, “these employees might look elsewhere for a job.” They can even burn out as work piles up.

As regional director of human resources for Marriott Hotels, Judy Wegman works in an industry vulnerable to economic uncertainty and burnout. “Stress has been up across all levels,” she says, while noting they’re seeing small signs of recovery. But despite the turbulence, Marriott achieved engagement numbers far above the Canadian average: 81 per cent of Marriott employees agreed they get a sense of accomplishment from their work, 80 per cent say the company inspires them to their best work every day and 87 per cent say the workplace is positive. Wegman believes a supportive, family-like atmosphere, where staff take interest not just in each other’s work life, but personal life as well, contributes to a positive corporate culture. Marriott also offered more tangible supports during the recession, like not cutting staff benefits (which are tied to number of hours worked) when the company had to reduce hours—that, she says, builds trust. And Wegman references her own experience. She started 25 years ago on the night shift and worked her way up. “We have hundreds of general managers who started as hourly employees,” she says, adding that all these aspects of Marriott’s culture stem from the same place, consistent values that go back to the company’s founding.

Having analyzed employee engagement trends for 10 years, Aon Hewitt’s Crawford echoes Wegman’s statement. “It’s like if you’re trying to move from a dysfunctional family to a functional family. It takes a lot of time and therapy.” In other words, it’s easier to maintain engagement, than to grow it from scratch—even more so when the economy is unpredictable. “During these times, the best companies just tend to stay close to their employees.”