CEOs misunderstand employee engagement

2010

The vast majority of senior executives admit that employee disengagement is one of the biggest threats facing their business. But despite this, issues round morale and motivation are rarely discussed at board level and most companies simply choose to ignore the problems caused by disengaged staff.

According to a new report from the Economist Intelligence Unit, more than eight out of 10 top executives in companies across Europe and the Middle East view disengagement as one of the three biggest threats to their business.

Yet almost half (43%) of the board directors questioned for the research admit that engagement issues – things like staff motivation, identification with the company goals or willingness to "go the extra mile" for the firm - are "occasionally", "rarely" or "never" discussed at board level. Moreover, barely more than one in 10 say that their companies regularly take action to tackle staff with continually low engagement.

This disconnect is exacerbated by the fact that many senior executives appear to have a fundamentally flawed view of what – and who – influences the levels of engagement within their organisations. Perhaps the most enlightening statistic to emerge from the report is the fact that nearly half (47%) of C-suite executives believe that they are personally responsible for generating the levels of employee engagement in their firm - a view that is shared by only 16% of senior directors outside the C-suite.

This self-inflated view of their own impact on employees is also apparent in the staggeringly low proportion (just 13%) of C-suite executives who believe that line managers and middle managers are chiefly responsible for staff engagement – this despite the raft of evidence pointing to line managers as being the key to morale and productivity.

Research by consultants Hay Group, for example, suggests that up to 30 per cent of variance in business results can be explained simply by differences in the work climate created by line managers, a view that the EIU report says is shared by managers outside the C-suite if not by their CEOs.

As the EIU's Paul Lewis, who edited the report, put it "this research strongly suggests that many, though certainly not all, CEOs retain an unrealistic and over-optimistic view about their own impact when it comes to staff engagement."

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Older Comments

This is very interesting research and thank you for bringing it forward for discussion. It's particularly interesting to me how CEOs think their influence on engagement is so proportionally high, but that middle managers is so much less.

It's quite true that the CEO sets the culture of the organization and the 'ripple effect' of their actions is quite real in how managers will behave (I wrote about that here: bit.ly/fvwmPP ), but to assume that middle-managers are less important in actual, direct employee engagement is naive. People quit bosses, not companies. They most often quit because of direct managers, not CEO style. That must never be forgotten.

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