Employee experience (EX) remains pivotal in today's dynamic business environment. As the pace of organizational transformation accelerates and the nuances of remote work become more ingrained, there's an increased focus on crafting human-centric workspaces. Over the years, the role of managers in shaping this experience has come into sharp focus.
In a recent survey we conducted, nearly half of the respondents believe that managers bear the responsibility for driving employee engagement. Meanwhile, 37% view this as a duty of the C-suite. What's surprising is that only 11% associate HR with this critical responsibility.
Organizations that prioritize employee experience, especially through effective managerial leadership, position themselves for an undeniable competitive advantage.
By deploying robust feedback mechanisms, businesses can tune into the immediate needs, aspirations, challenges, and incentives of their workforce. These insights lay the foundation for data-driven strategies, fostering sustained employee engagement.
Employee experience is defined as the cumulative impact of the multiple interactions that an employee encounters over their tenure with an organization, spread across all job-related sites, including the physical office, a WFH environment, commute, work-related travel, and the mind space inhabited during work.
To understand what constitutes employee experience, it is helpful to plot this concept against four contributing dimensions:
Employee Engagement can be defined as a mix of psychological states, attitudes, and behavior toward one’s job and organization. It encompasses the feeling of dedication, energy, and absorption in work (i.e., work engagement), desire to make the best effort at work (i.e., work motivation), emotional attachment, loyalty and dedication towards organization (i.e., commitment), as well as a feeling of belonging and oneness with organization (i.e., identification). In a systematic literature review of research between EE and business performance, it was found that EE supports organizational development and leads to improved business performance. In addition, EE also impacts valued attitudes such as active learning, innovation, knowledge sharing and adaptability.
On the other hand, Employee Experience (EX) is a holistic view of how people interact with and perceive their work. Similar to the way companies approach the Consumer Experience (CX), the end-users motivations, wants and needs are at the core of EX, and the critical objective is to find the intersection between those elements for each organization. By deeply understanding the human aspects of working in the organization, employers can design a tailored experience that demonstrates empathy towards employees, in turn building employee engagement, loyalty and performance. This is based on the belief that ‘your employees are your brand’.
EX takes into account the drivers of engagement all along the employment journey, with engagement being an outcome of EX. By focusing on the physical, cultural, digital, and work dimensions of the organization, a positive EX drives engaged employees.
Four key components constitute engagement:
1. Work engagement
2. Work motivation
3. Work and organizational commitment
4. Convergence with self
As you can see, while there is an overlap between the factors contributing to high employee engagement and a positive employee experience, the two concepts are distinct from each other. EX is vaster, influenced by granular factors like the ambient temperature and lighting conditions of the workplace, which do not impact engagement.
High engagement, on the other hand, is a specific outcome of positive experiences, along with other outcomes such as employee satisfaction and productivity. However, engagement and its relationship with EX needs to be closely studied to thrive in the ongoing war for talent.
It is vital to zoom out and consider engagement not only as a standalone concept but in the context of the holistic employee experience and the end-to-end employment journey. By deeply understanding the human aspects of working in an organization, employers can design tailored experiences that demonstrate empathy, build engagement, drive business outcomes, and eventually intersect the workforce with your corporate brand.
Simply put, tangible benefits and financial rewards alone aren’t enough to engage employees in the new normal. Instead, companies must look at more human and intrinsic drivers that make up EX throughout the employee lifecycle and eventually lead to higher engagement.
Apart from helping employees stay engaged, the nature of EX influences several other parameters of organizational success. Specifically, there are five reasons why companies must evaluate the cumulative experience across the average employee lifecycle and deliver EX tailored for business outcomes.
For your investments in employee experience to be successful and sustainable in the long term, you need to clearly measure the ROI. Measuring ROI on EX helps to get leadership buy-in on transformative HR programs, identify opportunities and challenge areas in your EX policy, and budget for employee centricity as you grow.
As industry leader Josh Bersin noted Employee Experience excellence directly leads to positive outcomes – across three areas Business, People and Innovation.
The process of calculating the returns accrued from positive EX and greater engagement usually focuses on financial targets, described below. It is important to remember that while this is an important outcome of employee experience excellence, it is not the only one.
Positive employee experiences and an engaged workforce can significantly reduce a company’s operational expenses, thereby improving your bottom line. This includes savings from reduced absenteeism, lower healthcare costs, a reduction in workplace accidents and related penalties, and, most importantly, savings in turnover costs. In addition, your costs of executive hiring will also decrease as a more engaged workforce, and greater commitment towards the company paves the way for internal hiring, upskilling, and a more efficient succession plan.
In addition to helping organizations save, investments in EX can also help you earn. These can be factored in as additions to your top-line revenues – as a result of better talent (hired via referrals from highly engaged employees), better products (built by employees who understand and are invested in the company’s vision), better services (provided by employees that are happier, and enjoy a state of mental and physical wellbeing), and a better reputation (promulgated by employees that act as your corporate and cultural advocates). Investment in EX can unlock sales profitability (driven by motivated employees who contribute to the company’s objectives) in the short term and a significant rise in equity value in the long term.
The third component of your returns from EX is the gains obtained from greater ease in conducting daily business operations. For example, as engaged employees recommend their talented peers, you’ll find your recruiting pipeline becoming more efficient and cost-effective. Similarly, problem-solving happens much faster in a highly engaged work environment. Employees are more likely to adhere to leadership decisions, removing operational bottlenecks. Product development cycles also accelerate, helping to get a first-to-market advantage. All of these will factor into your ROI as gains from ease of doing business.
To calculate ROI, therefore, organizations must take stock of the as-is state of performance even as they come up with a new EX strategy. As the change program is implemented in stages, the metrics used to measure as-is performance are re-examined. This reveals the incremental % increase over time and allows you to dynamically adapt your EX strategy to invest in areas that are most value-generating.
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✔️ Learn more on how to calculate the ROI on employee experience
✔️ The distinction between EX and engagement
Leverage multiple channels - Multiple channels and a diverse set of tools will get you insights into the many aspects of employee experience. It factors in all forms of VoE, and by combining a variety of data sources, you can root out false positives and false negatives. It is advisable to use organisation-wide surveys, lifecycle surveys, pulse surveys, multi-rater feedback and open-ended comments.
Org-wide Surveys
Involve the entire population, to gain breadth and depth of info across the organisation.
Lifecycle Surveys
Specific individuals are invited to participate based on their stage in their employee lifecycle, eg onboarding or exit surveys. These are “always on”.
Pulse Surveys
Extended to a sample or the whole population. Useful for tracking trends, diving into detail on specific topics or employee groups. Eg. employee net promoter score, 10-20 question “dipstick” surveys, or longer topical surveys on topics like total rewards, mental health, diversity & inclusion, etc.
Multi-rater Feedback / 360° Reviews
Either include peer reviews, 180° or 360° feedback focusing on manager behaviours, competencies or values. These are usually reserved for developmental purposes, but when used carefully, may be applied as input for performance appraisals.
Comments / Sentiment
These include the analysis of open-ended comments in surveys, as well as the ability to respond to these comments in a psychologically safe way, eg. via an anonymous 2-way chat. This provides qualitative input to supplement the quantitative data collected via other methods.
Develop two-way communication - The continuous listening mechanism must include an acknowledgement of the fact that the VoE has been heard. You can achieve this by designing communications based on the input from end-users. The feedback can help shape follow-up actions such as further questions, and a brief snapshot of the insights gathered, creating a closed feedback loop. A closed-loop will ensure that the conversation is genuine and authentic (instead of being top-down), and positively contributes to the bonds of trust.
Get employee buy-in for continuous listening - A continuous listening strategy, as opposed to one-off programmes, requires active buy-in and participation from the workforce. Ineffective surveys can exacerbate disengagement instead of detecting its root cause. That’s why it is important to first communicate the programme to employees, set up continuous listening Champions if needed, and demonstrate the benefits of active participation. For example, frequent check-ins pioneered at Netflix by Patty McCord helped to both improve performance as well as reduce stress and anxiety.
Make it cross-functional - Continuous listening cannot be just a one-off checklist exercise, siloed to a single department, team, or business unit. That’s why companies must configure a centralised programme supported by data unification between departments to gather meaningful insights for specific employee segments and specific employment lifecycle milestones across the organisation. Different functions have different needs, different OKRs, and it's important to examine differences across various functions to identify opportunities for improvement.
Weave continuous listening into your culture - In the long term, listening to the VoE has to be so embedded in the company culture that it takes place seamlessly, through both formal and informal efforts, and can capture the micro-experiences of an employee’s workday. This requires training managers on the tenets of EX and employee centricity and active participation from senior leadership.
Download your own PDF copy :
✔️ Learn more on how to calculate the ROI on employee experience
✔️ The distinction between EX and engagement
