March 13, 2019

A guide to designing an Employee Engagement Program

An employee engagement program is a critical component of the Human Resource’s yearly strategic plan. Large organisations such as Cisco have their entire employee engagement planned out for every day of the year. This article structures the step-by-step process of designing an annual Employee Engagement Plan. This guide follows the steps prescribes by the widely successful Strategic Management framework.

Environmental Scan

Step 1: Scan the Internal Environment of the Organisation

Scanning the internal environment constitute of studying the interactions between an organisation’s employees, management, stakeholders, business strategy, culture, resources and capabilities.

The tools that can be used to conduct this study are:

  • Group discussions
  • Employee/ Stakeholder Interviews
  • Employee surveys
  • Resource data
  • Performance reviews
  • Feedbacks

|| Expected outcome of this step: Strengths and Weaknesses of the (HR)organisation

Step 2: Scan the External Environment of the Organisation

The external environment of an organisation consists of the competitive, economic, political, sociocultural and technological landscape of the market the organisation is working in. These are important to be taken into consideration in framing an annual engagement program. These affect the effectiveness of all strategic initiatives.

For instance, Abhijit Bhaduri, author of the best seller ‘The Digital Tsunami’ mentions how technology trends like Augmented Reality and Holography can be effectively used in job simulation and employee experience. Thus having a careful watch on changing competitive benchmarks, industry trends, etc., prove useful to reinvent the engagement program.

The following tools can be used to conduct this scan:

  • Market research
  • Benchmarking
  • Competitor Analysis
  • Trend Analysis

|| Expected outcome of this step: Opportunities and Threats of the (HR) organisation

Formulating the Strategies

Step 3: Setting Organization’s Employee engagement objectives

The process of goal setting typically constitutes of defining objectives that the organisation wants to achieve in their people front – their culture, human capital, their people policies, etc. Strengths, Weaknesses, Opportunities and Threats can be a context to determine the objectives.

For example, an assumption such as - ‘Our competitors use employee referrals as a strong source to recruit their talent. Referral employees tend to be the best and the most retained talent in the industry,’ is a threat that could lead an organisation to consider ‘Improving employee referrals’ to be their HR goal.

The S.M.A.R.T. methodology is predominantly used and is famously known for its ability to guide and help achieve goals. It draws the following guidelines.

For example, a goal like ‘Improving the employee referrals of the company’ needs to be:

  • Specific, for example, ‘We aim to improve our employee referrals.’
  • Measurable, for example, ‘We aim to improve our employee referral %age from X to Y.’
  • Achievable, for example, ‘We already are at X, thus achieving Y should be practical.’
  • Relevant, for example, ‘Employee referrals are a double-edged sword that helps recruit new employees and that also indirectly indicates the employee Net Promoter Scores.’
  • Timely, for example, ‘This increase in employee referrals needs to be within this financial year.’

|| Expected outcome of this step: A timeline and a priority list of SMART goals.

Step 4: Gap Analysis

After setting the objectives, the next step is identifying the status quo of the variables and recognising the distance that needs to be covered to achieve the planned goals.

This can be done using various tools, but a Fishbone (Ishikawa)analysis is a pretty simple and effective tool to drill down on the exact issues that need to be tackled to achieve these goals. The following is a snapshot of how Fishbone analysis (Lean Six Sigma) is done.

  • Organise a cross-functional focus group.
  • Allow them to identify the root causes (gaps) that affect achieving a prescribed goal.
  • The root causes (gaps) can be categorised under ‘People’, ‘Processes’, ‘Policies’, etc., and further drilled down.
  • Root cause analysis recommends understanding up to 5 levels of ‘Why’s of every cause to derive the exact root cause.
  • List out the final list of root causes (Gaps).

For example, a fish bone analysis of ‘Employee referral’ might bring out root causes such as ‘Pay inequities’, ‘Lack of employee insurance’, ‘insufficient employee feedback mechanisms’, etc.

|| Expected outcome of this step: Qualitative /Quantitative Gaps in the existing process

Step 5: Choice of Strategy

Once the exact gaps in the process are listed, these need to be prioritised to execute. There generally are a number of paths to achieve goals, thus, selecting the right strategy (or a gap to tackle) is a critical component of execution.

The fishbone analysis further allows screening and prioritising these gaps using the following method:

Against each of the final list of root causes, evaluate the following:

  • How does solving this gap impact the achievement of the goals? (Impact)) (Rate this on a scale of 1: signifying low impact to 10: signifying high impact)
  • How financially feasible/ easy is it to work on solving this gap? (Ease) (Rate this on a scale of 1: very difficult to 10: very easy)
  • Calculate the [Impact + Ease] value and tabulate it against the respective root cause
  • Order the list of root causes (gaps) in decreasing order of the sum (A Pareto chart)

For example, a gap such as ‘Pay inequalities’ has low ease (because of the high cost involved) and a high impact, whereas ‘Insufficient employee feedback mechanisms’ has high ease (because the cost of implementation is low) but has a moderate impact. Depending on financial feasibilities and business priorities, leaders should further choose to tackle apt strategies.

|| Expected outcome of this step: An employee engagement program -  the list of all the strategies that aim to address the top priority gaps.

Implementing the Program

Step 6: Creating the team

The team that leads the implementation of employee engagement is important for its success. Depending upon the expertise a particular strategy requires - the team needs to have members who can contribute to it.

For example, a ‘Creating a robust employee feedback mechanism’ strategy requires questionnaire design experts, technology experts (if automation is required) and HR experts (to lead and implement the strategy).

|| Expected outcome of this step: List of team members and their roles in each of the high priority strategies.

Evaluating the Program

Step 7: Measurement of performance

The 'measurability' aspect of the SMART goals provides metrics to be watched to evaluate the impact of the strategies to achieve goals.

For example, for the goal ‘Increasing employee referrals from X to Y’ - the actual percentage of employee referrals out of the total recruitment is the metric to be watched.

|| Expected outcome of this step: Value of the Metric measured.

Step 8: Analysing Variance

The variance between actual and standard performance needs to be calculated to find a further gap in implementation.

For example, if the strategies did not allow achieving an expected Y% employee referrals within the stipulated time, these need to be re-evaluated and reconsidered.

|| Expected outcome of this step: Variance of the Metric measured (= Planned metric value – Actual achieved metric value)

Step 9: Taking Corrective Action

Re-evaluation of strategies should follow the entire flow of setting goals and selecting strategies (From Step 1 through 9). The reason why a strategy is ineffective or a goal is not being achieved could be because of a wrong assumption throughout the course of planning a strategy.

For example, the reason why the goal ‘Improving the employee referrals of the company’ is not being achieved could be because of the following few of the many other plausible reasons.

  1. The target to be achieved was assumed wrong - 'Y' was too high a target.
  2. The timeline of 1 year is too short.
  3. The fishbone analysis missed out a major determinant, namely, ‘Referral rewards for the referring employees'.
  4. The impact analysis on ‘Pay inequities’ were lower than assumed.
  5. The team did not have an important skill required for implementing ‘Employee feedback’ – questionnaire design.

|| Expected outcome of this step: Identifying the wrong assumptions, correcting it and reinitiating the strategy

To summarise, the following are the steps to design an employee engagement program:

Step 1: Scan the Internal Environment of the Organisation

Step 2: Scan the External Environment of the Organisation

Step 3: Setting the Organization’s Employee engagement objectives

Step 4: Gap Analysis

Step 5: Choice of Employee Engagement Strategies

Step 6: Creating the team

Step 7: Measurement of performance

Step 8: Analysing Variance

Step 9: Taking Corrective Action

Xoxoday Team

Xoxoday is a SaaS commerce company with products for employee and channel management.