Re-engaging top performers after a tough recession Featured

8:00pm EDT June 25, 2010

Just when companies need their most talented employees to capitalize on the recovering economy, new evidence suggests that many of these top people may not be up for the task. Since 2008, overall employee engagement dropped by 9 percent. But engagement levels for top-performing employees fell by 23 percent according to the 2009/2010 Strategic Rewards Report from Towers Watson.

“The survey numbers were surprising and significant,” says Bill Greene, senior consultant for the Talent, Rewards and Communications practice at Towers Watson. “When engagement declines, employees are less likely to recommend their companies to others. They’re less likely to devote extra energy to their jobs. Employees — especially top performers — become more likely to look for opportunities at other organizations. That means now is the time to take steps to re-engage top talent — before the job market rebounds.”

Smart Business spoke with Greene about the best ways to re-engage top performers in the aftermath of the recession.

What factors contributed to the decline in employee engagement?

The past couple of years have been trying for all employees. Even people who avoided layoffs still experienced significant disruptions — pay and benefit cuts, forced sabbaticals and diminished job opportunities. Well-publicized business failures, ethical scandals and regulatory challenges also had an impact. Employees are increasingly focused on the image of their employers and their success in managing risk — both financial and reputational.

The cumulative effect is that the recession has further frayed the social, emotional and economic fabric that connects employees to a company. Many folks describe this fabric as the employee value proposition, or EVP. It’s the ‘deal’ an employer and employee strike when they work together. Top-performing employees are often most sensitive to shifts in the EVP. They have high expectations — for themselves and for their employer. If the EVP isn’t what it used to be, top performers often feel it first, care about it most and are most likely to try to do something about it.

Do most companies have an EVP?

A recent study we conducted uncovered some really interesting results about EVPs. In this study, only 28 percent of employers responding indicated that their company had a formal employee value proposition in place. However, 74 percent of employees felt their company had an EVP. That’s a striking difference. It suggests many employees impute their own EVP — which may or may not align with what the company wants it to be. In addition, 41 percent of high-performing employees felt that changes companies made during tough times had a negative impact on the EVP. Smart companies recognize these factors and are working to shape and manage their ‘deal’ rather than having it designed by default.

How are high-performing companies responding to the engagement challenge?

Companies are taking a variety of steps, but four of them stand out:

Defining (or redefining) critical competencies. Whether the challenge is retaining top performers or hiring for future growth, companies are looking again at which competencies and skills will drive business success. Then they’re retooling the roles, skill requirements, rewards, hiring, training and career development practices to support them.

Identifying pivotal employees and showing that they matter. Top and critical performers (for example, those who drive revenue or are instrumental in product development) want to know they have a future with the company. Job promotions send this message, but they’re not always possible in this economy. So top companies get creative with special assignments, attachment to high-visibility projects, skill-building opportunities, and formal or informal recognition.

Re-evaluating (and optimizing) ‘the deal.’ A number of companies are considering whether the employee value proposition they have still matches their business and talent. So they’re looking at redesigning their EVPs. Using marketing research techniques with employees, along with financial modeling, they’re able to develop reward program alternatives that maximize employee value (especially with pivotal employees) based on the total amount they want to invest for rewards (which may be lower than, higher than or the same as what they are investing now).

Communicating. When it comes to communications, high-performing companies distinguish themselves with courage, innovation and discipline. They have the courage to explain to employees the rationale behind difficult business decisions and actively address the impact. They’re innovative in creating brands and messages and using media (including social media) to show employees how their work affects the business — especially as business conditions change (for worse or for better). They’re disciplined about having a plan, documenting it and measuring results.

Where do managers fit into the equation?

Most employees look to their managers to interpret vision and goals, clarify rules and make meaningful connections between the individual and the enterprise. Unfortunately, managers don’t appear to get a ringing endorsement from employees. In our 2010 Global Workforce Study, managers scored higher than senior leaders on a range of behaviors, including overall effectiveness. But employees felt managers still fell short, especially on the ‘human’ dimension of their role (for example, related to performance management). For many organizations in this economy, frequent manager transitions and shifting business priorities have hindered the focus on manager development. But building basic manager skills related to communication, performance management, and managing change warrant renewed attention and investment because of the strong, positive impact on employee engagement.

Bill Greene is a senior consultant for the Talent, Rewards and Communications practice at Towers Watson. Reach him at (415) 836-1286 or