PULSE SURVEY

A Winning Approach to
Employee Success

Sponsored by
SPONSOR PERSPECTIVE

In 2020, the business community was gripped by a confluence of crises. A

global pandemic, civil unrest, an economic crash, and a forced transformation
to remote work caused chaos and uncertainty for many workplaces
around the globe.

But an interesting thing happened.

After a decade of economic expansion—the longest in history—the employee

engagement levels of U.S. workers spiked. It’s true. According to a Quantum
Greg Harris Workplace study (and many other sources), the collective will of employees
CEO to advocate for their employers, to give discretionary effort, and to stay with
their employers all topped out at new highs.
Quantum Workplace

The retention aspect is predictable—an economic crisis isn’t an ideal time

to be shopping around for a new job. But the elevated levels of advocacy
and discretionary effort should silence the last remaining skeptics who thought engagement was a vanity
metric and a lagging indicator of financial success.

Employee performance, on the other hand, has gained traction quickly in its connection to business
outcomes. We know that high performers help teams meet goals and businesses get results. That’s why
attracting, developing, and retaining top talent are critical. It’s why we’ve seen a wave of modernized
performance management processes that help leaders understand, track, and maximize employee
performance.

Both engagement and performance are invaluable to businesses. But for too long, too many organizations
have seen these two important inputs as competing—or at the very least as mutually exclusive.

To turn culture into an unfair advantage, a new generation of talent leaders are merging engagement and
performance. Together, these concepts drive employee success. They create a crescendo of individual and
team pursuit. When engagement and performance are tethered together, goals and priorities are clear,
managers are more agile to change, relationships are stronger, and organizational success is scripted
rather than accidental.

Talent initiatives tend to be short experiments if they don’t deliver ROI. But the standard of ROI shouldn’t
scare talent leaders. In fact, the more closely you tie engagement and performance outcomes, the easier
ROI is to demonstrate. When performance is measured and discussed continuously, it builds engagement.
And when engagement is monitored continuously, it motivates performance.

We partnered with Harvard Business Review Analytic Services to scrutinize this idea. Using empirical data
and detailed interviews with HR and C-suite leaders, this research project weaves together two previously
distinct practices among organizations. And it confirms an idea that will shape the next several economic
cycles: businesses that integrate employee engagement and employee performance initiatives will create
durable cultures that win.

Employee success has become the most important executive key performance indicators. And category
leaders will be the businesses that best integrate employee engagement initiatives with employee
performance measures.

Learn how Quantum Workplace can help you realize employee, team, and business success at
quantumworkplace.com/success.
A Winning Approach to
Employee Success

Talent-minded organizations recognize that increasing HIGHLIGHTS

employee engagement can improve how well their
workers perform in their jobs and, consequently, bolster
the results of their business. Discretionary effort, or 81% of respondents strongly
agree that highly engaged
going above and beyond the basic requirements of employees perform better.
the job, kicks in and increases productivity and even
quality, as long as it’s channeled in the right direction.
72% strongly agree that
“There are good business reasons for focusing on organizations with highly
employee engagement,” says Julie Cummings, managing engaged employees have
happy customers.
director and chief human resources officer at BKD,
a national CPA and advisory firm that provides audit,
tax, and consulting services to its clients. “When we 37% strongly agree that
employee engagement is a
have more highly engaged employees, discretionary significant area of focus for
their own organization today.
effort increases.”

The benefits of this at BKD are significant. “Engaged employees become better
advisors to clients,” Cummings says. The company has seen a direct correlation
between employee engagement scores and the results of surveys that measure
client satisfaction and experience.
Cummings is not alone in seeing engagement as a means to better
performance. Eighty-one percent of the 984 business executives responding
to a recent survey by Harvard Business Review Analytic Services strongly
agree that highly engaged employees perform better and are more productive
than employees with average or low engagement. However, only 37% strongly
agree that employee engagement (EE) is a significant area of focus for their
organization today. This disconnect exists even though nearly two-thirds (63%)
of respondents say that their organizations have revamped their approach to
performance management (PM) within the past two years.

Pulse Survey | A Winning Approach to Employee Success Harvard Business Review Analytic Services 1
 More than half of respondents say the primary business goals for
their investments in employee success are to improve productivity
and retention (53% and 52%, respectively). But only around a third
have actually achieved these goals.

Tying EE to performance as a practice is essential, especially poor engagement, when, in fact, it was the failure to integrate
as companies continue to manage dispersed workforces and performance management and engagement best practices.”
many increase the percentage of employees who work from Now the pendulum appears to be swinging back. A majority
home on a more regular basis. Done in a vacuum, increasing of respondents (61%) say their company aligns individual
engagement adds little value, according to Peter Cappelli, employee performance goals to team and/or organization
George W. Taylor professor of management and director of goals, and nearly half (46%) use some form of rating/ranking
the center for human resources at The Wharton School of in their PM process.
Business at the University of Pennsylvania. “Engagement as The return to more metrics-based performance management
a measure doesn’t tell you what the problem is that needs to doesn’t mean abandoning engagement programs, however. In
be solved,” he says. “You could pump it up and still not see fact, quite the opposite is true. “Some of those [engagement]
better job performance.” The most effective organizations bring tools had great logic behind them,” says Whiteman. “They
the two disciplines together so they reinforce each other, with were around continuous feedback and listening and two-
channeled engagement improving performance and better way communication—awesome stuff. But what ended
performance increasing engagement. up happening was this employee listening and employee
“The two feed on each other,” says Heather Whiteman, who engagement became very optional. It left a hole where many
teaches people analytics at the Haas School of Business at the people were not getting any feedback.”
University of California, Berkeley, and is the former head of There’s still plenty of work to be done with PM processes.
people strategy, analytics, digital learning, and HR operations The survey reveals a lack of consistency in the use of tools to
at GE Digital. “It’s cyclical, and that needs to be represented assess employee performance, with only 45% of respondents
in the way that we work.” saying their organizations use consistent tools across their
If respondents believe that engaged employees perform business. Less than a third (31%) incorporate metrics to identify
better, and so many have revamped their PM efforts in recent high performance in individual employees based on their role.
years, why is there still so little focus on EE today? Our research “Business and HR leadership have really felt the negative
uncovered conflicts between EE and PM endeavors in many impact of not having an objective, even if flawed, way of
organizations. This report identifies ways to work out those understanding who their good performers are and being able
conflicts and shows how some organizations are using an to match that to outcomes,” Whiteman says.
engaged approach to performance management to achieve
their corporate goals.
The Business Case for
Frequent Check-Ins
Performance Management While organizations are clearly moving away from stand-alone
Lacks Consistency annual performance reviews, expectations for how often
Performance management has only recently come back to the managers discuss priorities, performance, and development
forefront. Of the organizations surveyed that have updated with individual employees vary greatly. Only 11% say managers
their PM approach within the past two years, 24% have done are expected to connect with individual employees just once
so as recently as the past six months, and another 22% have a year. FIGURE 1 Twenty percent say managers are expected to
done so in the past year. Only 27% say it’s been over two years have such conversations two to three times a year, while 14%
since they’ve updated their PM approach, and 10% don’t know. say these should take place quarterly, 21% say monthly, and
These updates were necessary, says Whiteman. “Many 17% say weekly. Fifteen percent have no defined expectations,
companies basically dropped performance management with such meetings happening on an ad hoc or as-needed basis.
in favor of employee engagement,” she says. “Rather than More frequent check-ins are a great way for managers to
fix the performance management process to enhance engage their employees, set short-term goals, and adjust
engagement, they dropped the evidence-based approach course as conditions change. Valet Living, which offers home
altogether. They assumed measurement was to blame for waste pickup, cleaning services, fitness programs, concierge

2 Harvard Business Review Analytic Services Pulse Survey | A Winning Approach to Employee Success
FIGURE 1

Frequency of Performance Conversations

The stand-alone annual performance review is becoming a thing of the past.

30%

20

10

11% 20% 14% 21% 17% 15%

0

Once a year 2-3 times a year Quarterly Monthly Weekly Ad hoc/as needed

Source: Harvard Business Review Analytic Services Survey, April 2020

services, and more to apartment complexes and property doing, and let their manager know what they need to be most
management companies, shifted to monthly check-ins with effective in their role. “That has been a huge shift for us,”
its 700 full-time associates three years ago. (Its 6,000 part- says Davies. “Managers are having intentional performance
time workers participate in frequent pulse surveys and the conversations every single month.” Built into the process is
annual engagement survey, as well.) the message to associates that they matter, Davies says. It’s
“We evaluate performance over 30-day periods,” says a two-way conversation about what success looks like for
Nicole Davies, vice president of talent optimization at Valet that employee’s specific role.
Living. “We do monthly conversations at the beginning of This approach proved its value during the coronavirus
the month that focus on near-term goal setting, and we pandemic in 2020, when client needs changed radically
keep them very simple. It’s a couple of written questions overnight. Even though Valet Living workers were deemed
that lead to a conversation between manager and associate “essential” (one of their core services is trash pickup), demand
about the things that are important for both. And we ask lots for some of the company’s services (pet walking and in-home
of questions around engagement and really try to create a cleanings, for example) dropped dramatically during the
conversation that goes both ways.” stay-at-home directives. To compensate, working closely
Not only are associates given clear instruction on how they with managers and associates, it quickly shifted some of
can succeed at work, but they can also raise questions and its workforce to running errands and contactless package
concerns, talk about how they feel about the work they’re delivery—services that surged in demand as customers sought
to limit their trips to pick up groceries, prescriptions, or
meals. Making this strategic shift effectively and safely was
only possible because of the close connection the company
has with its employees, despite them being spread across
The survey reveals a lack of the country.

consistency in the use of tools to

assess employee performance, with Linking Engagement and
only 45% of respondents saying their Performance
The link between engagement, productivity, and performance
organizations use consistent tools may be most apparent in the area of customer satisfaction.
across their business. Almost all respondents (92%) agree that organizations with
highly engaged employees have happy customers, with 72% in
strong agreement. “Think about it from a business perspective,”
says the Haas School’s Whiteman. “Engagement equals
discretionary effort, which equals higher business outcomes
for the same amount of dollars. It is ROI at its finest—and the

Pulse Survey | A Winning Approach to Employee Success Harvard Business Review Analytic Services 3
best possible return on investment for your human capital. Managers Need Help to
And that is incredibly powerful.” Deliver Results
Achieving that ROI, however, requires linking EE and PM Managers are a crucial link in using engagement to improve
in a meaningful way. This may help explain why such a high performance, but a somewhat weak one. Only half of
percentage of respondents agree about how important highly respondents agree that managers in their organization
engaged workers are but why a much lower percentage say have productive conversations with their teams about their
it’s a significant area of focus for their organizations today. engagement survey results (17% strongly agree, and 33%
At accounting firm BKD, not only is engagement “really core somewhat agree). Compounding the problem is the fact
to our business,” says Cummings, but connecting employee that only 22% strongly agree that managers have a clear
engagement and PM is “absolutely fundamental” to sustaining understanding of what high performance looks like for their
a client-focused culture. “We build our performance programs direct reports’ roles.
by listening to the feedback and themes gathered through Not having managers more involved in the effort to increase
our annual engagement survey and other feedback tools, performance through engagement is a serious problem.
and creating action plans to support improvement. We’ve Forty-two percent of respondents say that managers’ lack
identified a direct link between employee performance and of knowledge about how to have effective development
engagement.” conversations with employees is one of the greatest barriers
Such integration appears to be the exception to the to getting business value from their organization’s investments
rule. Thirty-nine percent of respondents say that results in EE. This managerial shortcoming was cited by more survey
from engagement surveys are evaluated and acted upon takers than any other barrier. FIGURE 2
independently of their PM process, and 15% have aligned their To address this pressing need, BKD has created a template
EE and PM efforts only at the group or department level. Only for managers’ one-on-one conversations with their teams. This
21% have fully integrated EE into the PM process at both the script includes five questions for the team member to answer
group and individual levels. and five for the manager. It’s designed to be brief, using bulleted
When performance is managed without regard to points. “It’s more of an outline to drive the conversation rather
engagement, it can lead to a misapprehension of what than a tool to document everything you know and avoid the
good performance is, Whiteman cautions. “There is a lot of need to talk,” Cummings says. “The purpose is not to complete
emphasis right now on tracking employees’ productivity, and the form but to guide the conversation.”
people are starting to confuse the notion of productivity with BKD uses pulse surveys and focus groups to track how
performance,” she says. “Productivity is an output measure. managers are doing. These data collection forums uncovered
Performance is an outcome measure …. It is evaluative, it’s “a need to train managers on using BKD’s performance tools,
subjective, and it’s aligned with business goals.” Productivity as well as on best practices for having coaching conversations
that is driven without regard to engagement, Whiteman and offering feedback.”
continues, “is cranking out the hours. That person who’s not These efforts also revealed that some managers were
engaged will get burned out and quit.” not regularly holding one-on-one conversations with their
At many companies, stand-alone information systems for employees or responding to requests for feedback. As a result,
EE and PM exacerbate the problem. A third of respondents the company is now building in accountability measures for
(32%) say that the disconnect between these systems is managers as it redesigns manager training and resources.
one of the greatest barriers to getting business value from With managers at the heart of companies’ efforts to improve
their company’s investments in EE. Wharton’s Cappelli goes performance and engagement, it is important to both support
further, saying most companies “don’t have good measures managers and hold them accountable. Currently less than
of individual job performance. Databases don’t connect easily a third of survey respondents (31%) say their organization
to each other, and HR doesn’t have the staff to do it.” ties managers’ financial incentives to their team’s and/or
Valet Living’s system is designed for written comments organization’s performance. Only a quarter (25%) take team
to be entered by both the associate and the manager prior engagement into account as a factor in managers’ performance
to their monthly conversation, according to Davies. Once evaluations. FIGURE 3
the conversation takes place, either party can go in and add To make good decisions and help employees improve,
remarks or finalize the conversation so that it becomes a new managers also need access to current, relevant data about
chapter in the employee’s “performance storybook.” the people they manage. “The biggest challenge is they don’t
The storybook includes quantitative trend data around have measures of job performance that they trust,” Wharton’s
performance, potential, and retention risk (this data is Cappelli says. Indeed, 40% of respondents say that they do not
accessible by the manager, company leaders, and HR), as well have access to all the data they need as a manager or leader
as the qualitative data driven from the monthly conversations to understand what motivates and engages their employees.
between the manager and associate, Davies says.

4 Harvard Business Review Analytic Services Pulse Survey | A Winning Approach to Employee Success
 “We build our performance programs by listening to the feedback and
themes gathered through our annual engagement survey and other
feedback tools, and creating action plans to support improvement.
We’ve identified a direct link between employee performance and
engagement,” says Julie Cummings, managing director and chief
human resources officer at BKD.

FIGURE 2 FIGURE 3

Barriers to Getting Value Employee Engagement Practices

Managers need better tools and training to make Companies use a range of practices to get value from
investments in engagement pay. employee engagement investments.
EE = EMPLOYEE ENGAGEMENT PM = PERFORMANCE MANAGEMENT EE = EMPLOYEE ENGAGEMENT PM = PERFORMANCE MANAGEMENT

42% 51%
Managers don’t know how to have effective development conversations Use survey results to improve employee experience

32 48
EE and PM systems and processes are not connected Provide regular feedback to employees, all levels

32 43
Employees don’t feel ownership Use consistent tools to assess EE across the organization

29 43
Poorly defined goals and metrics for engagement efforts Share EE results transparently across the organization

25 42
Cultural resistance to feedback Managers, HR, employees share responsibility for EE

23 26
Managers don’t meet often enough with employees Link engagement to business metrics

22 25
Lack of senior leadership support Team engagement is a factor in manager evaluations

21 19
Performance systems too focused on compliance Incorporate team results into the PM process

14 12
EE and PM systems and processes are outdated None of the above

Source: Harvard Business Review Analytic Services Survey, April 2020 Source: Harvard Business Review Analytic Services Survey, April 2020

Pulse Survey | A Winning Approach to Employee Success Harvard Business Review Analytic Services 5
56%
of respondents say
their organization
has achieved
positive ROI from
its investments in
employee engagement.
 Of course, employee success does not rest solely on
managers’ shoulders. Forty-two percent of survey takers
say that managers, HR professionals, and employees share
responsibility for employee engagement at their organization.
But a third (32%) say that one of the greatest barriers to getting
business value from EE is that employees don’t feel ownership
of their own development, performance, and engagement.
Talent-savvy leaders focus on
Companies like BKD and Valet Living are betting that their the combination of quantitative
process of more regular two-way conversations with employees and qualitative data that links
about goals and outcomes will increase employees’ sense of
organizational goals to the work
ownership of their own development and careers. A key goal
at BKD is to “instill a culture where employees are initiating of managers and employees.
that process,” Cummings says, “where they ask for feedback
and create meaningful goals.”

FIGURE 4
Producing Results from Investments
in Employee Success Business Goals of Employee Success Efforts
Providing a culture where employees can be self-starters Companies seek different outcomes from their
and take the initiative isn’t just an altruistic pursuit. It’s an employee-success efforts.
investment in the organization ultimately meeting its financial
and operational targets. “The goal is do we have the capabilities 53%
and the skills to deliver on our business objectives,” Whiteman Productivity
says. “That’s the question of performance management.”
The primary business goals for organizations’ investments 52
in employee engagement, development, and performance Employee retention or turnover
management are productivity and retention, both chosen as
a top goal by more than half of respondents (53% and 52%, 35
Customer satisfaction (e.g., net promoter score)
respectively). FIGURE 4 However, many respondents say their
organizations have yet to realize those goals, with only 31%
31
saying they’ve actually improved productivity as a direct result
Quality
of the organization’s investments in employee success, and
only 36% saying they’ve improved retention. 25
“People data is harder than every other type of data out there,” Revenue growth
says Whiteman. “Dollars are easy. Quantifying manufacturing
outputs is easy. Supply chain … that math is easy. People are 23
hard, because they have uncontrollable variables that you Profitability
can never, ever account for.” These uncontrollable variables
include anything from an employee’s health to whether he or 10
she had an accident on the way into work to someone having Recruiting effectiveness
a bad morning at home. Talent-savvy leaders focus on the
8
combination of quantitative and qualitative data that links
Discretionary effort
organizational goals to the work of managers and employees.
Despite the absence of perfect evidence, respondents have 6
confidence in the business value of employee engagement. Safety incidents
More than half (56%) agree their organization has achieved
positive ROI from its investments in employee engagement, 5
with 25% in strong agreement and 31% saying they somewhat Absenteeism
agree. Valet Living specifically tracks employees’ performance
Source: Harvard Business Review Analytic Services Survey, April 2020
impact, growth potential, and retention risk. As a result, the
company is now poised to pay for performance rather than
just issuing blanket increases as it had done in the past when
it lacked that information.

Pulse Survey | A Winning Approach to Employee Success Harvard Business Review Analytic Services 7
 Data from this survey suggests that getting full value will require
providing more support and better incentives for managers, better
and more consistent tools and data, and the right metrics to gauge
the impact on the business’s bottom line.

The Future of Work and were made, too much time was spent working in a new way
Performance Management and with a new focus,” she says. “Very few companies will just
Organizations are changing their approach and recognize go back to business as usual, because they’ve had too much
the important role that engagement plays in improving time now to reset the way people think about work.”
both individual and team performance. They understand Moving forward, each business will have to adjust to
the positive effect the integration of these two previously changing conditions in its own way. For many, that includes
disconnected activities can have on a variety of important changing their approach to engagement and performance
business metrics, from productivity to customer satisfaction management. To ensure they are getting the highest return
to quality and growth. “Engagement drives performance, from their investments in human capital will require stronger
and our performance programs reinforce engagement,” connections between business goals, managers, and individual
Cummings says. employees, and greater visibility into what changes need to
But an execution gap remains, since many organizations be made on the ground.
are still finding their way to capitalize on EE and PM. Data “We’re using the voice of the associates to help us to think
from this survey suggests that getting full value will require through, ‘Do we need to evolve?’” Davies says. “Do we continue
providing more support and better incentives for managers, to do things the same way? Well, probably not. So, what’s new
better and more consistent tools and data, and the right and different, and how do we take their voices and commingle
metrics to gauge the impact on the business’s bottom line. those with the needs of the client and the needs of the business
The coronavirus lockdowns of 2020 will have a lasting effect to create something that’s going to work for us in the future?”
on how work will be done, with much more of it likely to be Answering that question will require EE and PM efforts to
handled remotely. Whiteman views the pandemic experience evolve, too. After all, the situations ahead will require new
as a real reset, not just a temporary condition. As the lock- bonds between organizations and their employees. More
downs extended from weeks into months, “too many decisions engagement will be needed to produce better performance.

8 Harvard Business Review Analytic Services Pulse Survey | A Winning Approach to Employee Success
M E T H O D O LO GY A N D PA R T I C I PA N T P R O F I L E

A total of 984 respondents drawn from the HBR audience of readers (magazine/
enewsletter readers, customers, HBR.org users) completed the survey.

Size of Organization Seniority Key Industry Sectors Job Function Regions

22% 25% 11% 21% 46%

10,000 or more Executive management/ Government/not-for-profit General/executive North America
employees board members management
10% 19%
24% 36% Technology 16% Europe
1,000 – 9,999 Senior management HR/training
employees
9% 19%
30% Financial services 9% Asia Pacific
29% Middle management Consulting
100 – 999
employees 9% 5%
7% Business/professional 8% Middle East/Africa
Other grades services Sales/business
25% development
Fewer than 100 8%
employees 9% All other functions less Latin America
Manufacturing than 8% each
3%
9% Other
Education

8%
Consulting services

All other sectors less

than 8% each

Figures may not add up to 100% due to rounding.

ABOUT US

Harvard Business Review Analytic Services is an independent commercial research

unit within Harvard Business Review Group, conducting research and comparative
analysis on important management challenges and emerging business opportunities.
Seeking to provide business intelligence and peer-group insight, each report is
published based on the findings of original quantitative and/or qualitative research
and analysis. Quantitative surveys are conducted with the HBR Advisory Council,
HBR’s global research panel, and qualitative research is conducted with senior
business executives and subject matter experts from within and beyond the Harvard
Business Review author community. Email us at hbranalyticservices@hbr.org.

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