Employee engagement: new challenges

Augmented reality, additive manufacturing, cobotics to name a few; this new wave of technologies is helping companies transform their processes, products and services.

Organizational Change

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Never before have we seen an exponential rise in radical or disruptive innovations. This disruption is not limited to products and services; some are even upending traditional business models. The Innovation life cycle of a product—which is the time when a new product enters the market, usually followed by incremental innovations, until another radical or disruptive innovation replaces the product—is also reducing.  

The gap between companies who have adopted these technologies to their advantage, the innovators, and the laggards who have not, is widening. Those who have not embraced developments will find it hard to catch up, leading them out of business.

Many organizations have implemented programs to encourage employees to engage with the business and create a culture of innovation. Some of these are rewards based, some focus on mindset and others on both. The strategies adopted by organizations can be broadly classified into two.

"The first is the traditional carrot and stick approach, a more extrinsic approach, and the other is intrinsic, this focuses on the employee mindset."

The first employee engagement approach has been critiqued by behavioral science research. The carrot-and-stick method works well for tasks that are straightforward which have a simple outcome where no lateral thinking is required. It works well for errands that are unchallenging, highly controlled or rule based where a set of instructions are followed. Here, rewards can provide a small motivational boost without any harmful side effects.

However, the nature of our jobs has changed dramatically and will continue to do so. Roles have become more complex and interesting. Duties require creativity and big picture thinking. In most cases, solutions are unknown and need problem solving. Tasks are non-routine. In this situation the carrot and stick method may not work.

According to research, such an approach promotes nearsighted thinking, narrows focus, limits possibilities, reduces creativity and fosters ver short-term thinking at the expense of long-term results. It extinguishes intrinsic motivation and diminishes performance. It creates mistrust and cynicism and encourages cheating, shortcuts and unethical behaviors. Last but not least, it is addictive. Even though this is what behavioral science tells us, organizations still focus on extrinsic motivators because in the short term results are quick.

"A fully engaged workforce is the dream of every organization."

Implementation of Industry 4.0 or Factory of Future will introduce new technologies that will change our workplaces. This will create new employee engagement challenges. Recent employee engagement surveys from across the globe show engagement dropping.

Given the importance of having an engaged workforce for the success of an organization, it is important to look at the new factors that will impact employee engagement in future:

Fear of redundancy: Large scale automation is now possible thanks to advancements in technologies such as AI and robotics. Certain physical jobs have the potential to be automated, especially those that involve physical activities in a predictable environment. The fear of machines replacing human beings is more present than ever before. Fear of loss of jobs will lead to a decline in work experience and employee engagement. This will present new challenges to organizations.

Responsive manufacturing: New advancements allow manufacturing of customized, highly configurable products at costs comparable to those of mass manufacture—a key competitive factor in the manufacturing industry of tomorrow. Exclusivity and customization will be the new norm forcing organizations to move away from standard products or service offerings. With more customization, the need to simplify associated processes will increase creating demand for innovation and staff engagement.

Changing workforce: With cobotics, an organization of the future will see employees work collaboratively with cobots and other bots. This will require radical changes in the way processes are done. A blue collar worker who turned nuts using spanners in an assembly line in the 20th century is now expected to propose improved methods to do the same steps. All of these demand more collaboration and thereby more engagement from staff.

Disconnect between business and science: Research in behavioral science encourages intrinsic motivation for employee engagement. One of the assumptions made is that employees will be paid enough to take the issue of money off the table. Therefore, they are not focused on money but on the work. At this point it is important to highlight the 2017 Global Employee Engagement Survey Report from Aon Hewitt. As per the report, rewards and recognition ranked first in the top 5 engagement opportunities identified across the globe. For many employees, pay fairness is at the forefront. It is not economically viable for many organizations to make pay or bonus increases. To address the issue of fairness, organizations need to understand the real and perceived gaps of pay, states the report.

“One size fits all” approach: The organization of the future will see changes in every aspect of the business. The level of engagement for each employee within the same function or employees across different functions will be different. Some functions will be less engaged compared to others. Devising engagement strategies for a “One size for all” fit may not be effective. The engagement strategy for a design function will have to be different from the shop floor. The approach may have to be more granular.

Every change brings a new set of engagement challenges since it depends on how people react to those changes. Organizations which are proactive in understanding the engagement level of employees and who strategize actions based on that will find their workforce passionate about new and better ways to achieve outcomes. This is what organizations seek in their pursuit of excellence.