December 29, 2017 by Mario Patenaude, Tammie M. Sorensen

Use evidence-based HR to grow your organization

Human resources managers tend to be most concerned with acquiring staff, the exit of workers from the organization, training and development, the administration of pay plans, benefits and other traditional HR issues. What this emphasis overlooks is the overall strategy of the business, and how effective an HR team can be at supporting or enabling that strategy.

HR rarely takes an active role in this planning process, but strategic HR professionals who emphasize an evidence-based approach have the potential to steer their company toward far greater success. Working alongside an organization’s owners, executives and leaders, HR can determine how to strategically fit their initiatives within the overall growth of the organization.

In most cases, HR emphasizes the importance of qualitative research over quantitative research. When success is observed, businesses conclude that it was achieved by whatever measures happened to be taken. However, they must accept this conclusion on faith, as it can’t be proven with hard numbers that show correlations between actions and outcomes. Without data, it is very difficult to maximize employee engagement. You might observe some success, but you will lack the knowledge necessary to repeat that success.

If you are not actively controlling an outcome, you have very little power over what happens next. From a strategic standpoint, it’s always better to have a blueprint to help you understand why things are happening (or not happening). This is one of the best ways to transform adequate performance into exceptional performance.

Measuring progress

In a numbers-based approach to HR, equations allow you to see all the variables and understand the correlation between the indicators, determining the recipe for performance. This approach enables you to establish a baseline and measure your progress and performance against other organizations in your industry. It’s very difficult to improve something you haven’t measured. Without numbers, you have no way of knowing where you are or where you’re going.

Engaged employees create engaged customers

When considering growth, there is a clear correlation between employee engagement and customer satisfaction. If you’re the buyer of a service or product, your experience changes greatly if you’re dealing with a highly engaged employee, rather than a disengaged one. Customers who have a poor experience might share that with others, negatively impacting the company’s future sales.

Engaged employees innovate

In the product or service business, there is also a clear correlation between employee engagement and innovation. If you don’t have a highly engaged workforce, you are unlikely to have innovative products or services, or the innovative processes and tools required to perform. As a result, your growth will be limited. You can certainly grow by buying another company and merging with them, but you’re just buying someone else’s customer temporarily. If you have a metric measuring engagement and you recognize a correlation between this and a positive customer experience, you will be in a far better position to retain customers.

Tracking engagement

Employee engagement is easily measured through surveys. Even if you are unsatisfied with the results of these surveys, they will reveal potential for progress. From research and evidence, we know a reasonably disengaged employee can become highly engaged. As a result of this improvement, research shows that you could see your operating margin triple.

The 5 drivers of engagement

Clients who wants to achieve high employee engagement – which transfers into high profitability – need to consider the five drivers of engagement: leadership, goals and objectives, workload/work-life balance, image of the organization and empowerment. Each of these drivers has a relative weight in terms of an employee’s engagement. With survey results, you can see how your engagement level compares to the most highly engaged organizations in the world. (You can compare yourself to Google – they are right there at the top – or a company working in your industry or country.)

Improving leadership

Surveys measuring employee engagement are organized according to several engagement drivers. One example is the quality of the leadership, which is a highly impactful driver of engagement. If it is very low and the reason your overall score is low, you can try to determine which piece of your leadership is causing the problem.

For example, there are four sub-elements of leadership. One is the degree to which the leader behaves consistently with the organization’s core values. Based on survey results, you try to determine what kinds of behaviour your leaders are demonstrating every day. Is the problem rooted in unclear expectations? Let’s say your leader is not behaving consistently with the organization’s core values. You have to get to the root cause, take a measurement, implement a solution and monitor the number to see if it’s going in the right direction. These measurements are leading indicators of organizational performance and/or profitability. If the numbers go up, profitability goes up.

Overcoming resistance

There are many reasons HR departments resist metrics. In some cases, the business’ leaders show no interest, giving their HR department little incentive to explore the potential of metrics. To make progress in this area, HR professionals need to actively convey the benefits of metrics to their employer. Many business owners are stuck in the transaction, paperwork, compliance world, but a more strategic, metric-based approach to HR can add enormous value to your organization.