Employee happiness is becoming a hot topic among CEOs and in boardrooms, and it's about time. The current issue of Harvard Business Review, which includes a series of articles focused on employee happiness, is just one more sign of the growing recognition that happy, engaged employees are more productive and generate better outcomes for their companies.
But there's also a risk in all this attention to "happiness." Happiness for its own sake is not the right outcome to seek. If you want happy employees, you can just pay them more. You can give them more time off. You can give them free lunches by celebrity chefs. Only a few of the things that make employees "happy," however, result in real, sustained benefit for the company. As Gretchen Spreitzer and Christine Porath note in one of the recent HBR articles, "It's not about contentment, which connotes a degree of complacency."
My colleagues and I agree with that. We have been studying the links between employee engagement and customer loyalty for a few years now, and we've found that the only route to employee happiness that also benefits shareholders is through a sense of fulfillment resulting from an important job done well. We should aspire not just to make employees "happy," but to do so by helping them achieve great things. In short, we should earn our employees' passionate advocacy for the company's mission and success by helping them earn the passionate advocacy of customers.
That's an ambitious goal, of course. And it necessarily links employee engagement to customer outcomes, the ultimate source of a company's success. Most companies' approaches to employee engagement fail to achieve the right sort of engagement. Here's some of what's needed:
1. True ownership by line managers. Most large companies depend on HR to measure and manage employee engagement. HR collects the feedback, analyzes it, and then "cascades" it through the organization, beginning with the CEO and then at progressive levels down to the front line, along with recommendations for improvement. But this keeps control, ownership, and responsibility firmly in the hands of a central team.
Real engagement — passionate advocacy — comes from making customers' lives richer, and there isn't much that HR alone can do to help employees achieve that. So Apple stores, JetBlue Airways, and others deliver employee survey results directly to operating managers, who can then sponsor shop-floor change initiatives. Perhaps more important, they feel full ownership of the results and for making progress. At Apple, for instance, employee focus groups identify key themes and issues from the surveys; employee teams then help develop solutions, which they present to store management. By the time the next survey comes around, managers can see whether the solutions have had the desired effects.
2. Simpler measurement. Most companies gauge employee satisfaction through the time-honored annual survey, managed centrally and comprising a huge number of questions. They often result in tremendously detailed reports across a large number of metrics. But many companies are taking a page from the Net Promoter playbook: They survey employees more often, ask just a few simple questions, and simplify the reporting. How likely would you be to recommend this company to a friend as a place to work? How likely would you be to recommend the company's products or services to a potential customer? What's the primary reason for your response? These companies allow employees to use their own words to identify opportunities and issues. The feedback can be difficult to hear — employees tend to be tough graders. But it can be much more powerful as a motivation to take action.
3. Direct feedback from customers. The most important step, of course, is providing a steady stream of feedback from customers and then "closing the loop" quickly by sharing it directly with employees in its most raw form. When frontline employees and managers hear directly from customers — when they see how customers scored their experience, when they hear what went right and wrong in the customer's own words — the effect is dramatic. Applause in the form of positive feedback inspires them to keep up the good work. Criticism often inspires employees to improve their performance on their own or to seek additional coaching so they can do better next time.
And it isn't just customer-facing personnel who can learn from customer reactions. Logitech, for instance, compiles Net Promoter scores for each of its products and ensures that the engineering teams responsible for each one see and hear what customers think. When one new keyboard got negative reviews, the company was able to identify the problems and quickly bring out an improved model.
Loyal, passionate employees bring a company as much benefit as loyal, passionate customers. They stay longer, work harder, work more creatively, and find ways to go the extra mile. They bring you more great employees. And that spreads even more happiness — happiness for employees, for customers, and for shareholders.
This blog first appeared on Harvard Business Review on 1/27/2012.