Why Employee Engagement Is Not Enough

Why Culture Trumps Engagement Every Time

Work on the importance of worker “morale” began in the 1920’s.  Morale morphed into job satisfaction in the 1930’s.  Conclusions about the impact of job satisfaction on key business results varied greatly over the ensuing decades, depending on how satisfaction was defined, the measurement technique used and the quality of the research.  As a result, the value of addressing employee satisfaction came to somewhat of a dead-end.  Satisfaction turned out to be a necessary but not sufficient factor in impacting key organization outcomes.

The more promising concept of Employee Engagement arose in the 1990’s. In general, engagement’s correlation to measures such as employee retention, customer service and productivity tended to be stronger than those found with satisfaction.  Emphasis placed on “correlation” because correlation was often misinterpreted as causation. Therein lays the rub with engagement – the old chicken-or-the-egg paradox. Measuring and addressing employee engagement has its benefits. But the debate about engagement actually leading or predicting meaningful results roils on.

Enter Organizational Culture.  Organizational Culture had a genesis similar to satisfaction – widely diverging definitions and fuzzy concepts that were interesting but not very useful.  That was the case until research conducted at the University of Michigan by Dan Denison identified the factors that comprise the perception of any organization’s culture, factors that could be reliably measured, understood and improved.  Initial and subsequent research found a strong correlation of the culture factors to revenue growth, return on investment, quality, employee satisfaction and customer satisfaction. Even better, Denison’s more recent research confirmed that culture is a leading indicator and driver of organization performance measures such as Return-on-Assets, Sales Growth and Market-to-Book Ratio.

Engagement trumps satisfaction but culture trumps engagement. Organization leaders can drive future business results by understanding and improving their organization’s culture.

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