Originally Published in The Harvard Business Review, August 16, 2016
By: Lewis Garrad, Employee Research and Engagement, Business Segment Leader – Growth Markets, Mercer-Sirota and Tomas Chamorro-Premuzic, CEO of Hogan Assessment Systems, a Professor of Business Psychology at University College London, and a faculty member at Columbia University
Although employee engagement has become something of an HR fad, it would be hard to deny that it matters. In fact, robust meta-analytic studies show that higher levels of engagement boost employee wellbeing, performance, and retention. For example, engaged business units tend to deliver better performance, as measured in terms of revenues and profits, and organizations with enthusiastic employees tend to have better service quality and customer ratings.
That said, engagement doesn’t always seem to add up. For starters, the correlation between engagement and performance outcomes is far from perfect, which means that many engaged individuals and teams are not delivering the results that leaders expect. By the same token, some leaders will find that their best performing teams are often amongst the least satisfied. How can this be?
A broad explanation is that while engagement is an important determinant of performance, performance is also affected by other factors – and sometimes those factors matter more than engagement. For example, a recent study by Google found that the critical drivers of effective team performance were an open and safe team culture, clear goals, and a strong sense of purpose. Likewise, scientific studies show that leaders’ judgment and decision making ability can affect team and organizational performance beyond engagement. This explains why certain leaders – think Steve Jobs or Jeff Bezos – can be so effective despite not displaying great people-skills or emotional intelligence: you can get away with it if you also have great judgment and vision.
It is also plausible that engagement itself can be a barrier to better performance if it’s taken to an extreme. When employees are too focused on getting along, they will probably not care so much about getting ahead, and as the “too much of a good thing” effect suggests virtually any psychological attribute is problematic at very high levels: e.g., ambition becomes greed, self-esteem becomes narcissism, and creativity turns into odd eccentricity.
In our view, there are four potential threats that high levels of engagement pose to companies.
Embracing the status quo. For most companies the competitive environment is relentless. In order to succeed, they need to constantly adapt. Although many studies show that people with positive mindsets tend to have more ideas, most leaders find that real innovation and change requires a restlessness and dissatisfaction with the status quo to drive people forward in a purposeful way. When it comes to engagement, it is possible that proud and motivated workers resist new ways of doing things because change seems counterintuitive, or even heretic, to them. In line, research shows that people who are optimistic about their performance stop trying to get better whereas frustrated and dissatisfied people tend to find creative breakthroughs when incentivized and supported in the right way. Thus the danger for leaders is that an engaged workforce becomes complacent or arrogant if it isn’t self-critical enough. Unsurprisingly, the last 30 years have been littered with companies that were deeply proud of what they were doing but not dissatisfied or paranoid enough to stay ahead of the competition — Nokia, Kodak and Yahoo! are just a few examples. Needless to say, progress is generally driven by people who reject the status quo and are dissatisfied enough to seek to change it.
Pushing employees into burnout. When encouraged, it’s easy for highly engaged employees to become so involved in their job that they stop being concerned about other important parts of their lives. Studies have found that highly engaged workers tend to suffer work/family interference more often, and that people who fail to take down time can end up damaging their own health. Even if companies would like employees to become spiritual workaholics, that prospect shows little consideration for employees’ long-term wellbeing – and even the company’s own long-term health. When engaged employees become burned out employees, on-the-job performance can suffer.
Giving an unfair edge to certain personality types. Although few people acknowledge this, engagement is not just driven by situational factors: it is also the result of individuals’ personality. Our own research shows that employees who are naturally more optimistic, positive, emotionally stable, agreeable, and extraverted, tend to be more engaged – regardless of the circumstances. Hiring naturally happy people to (artificially) inflate engagement scores does not result in improved productivity or performance; but it does involve unfairly excluding people who are more pessimistic, introverted, demanding, or moody. It is as if Tripavisor or Amazon only included reviews by super friendly and agreeable customers – the ratings would be high, but they would not be indicative of higher quality. It is important to acknowledge that different personalities thrive in different contexts; for instance, having engaged service staff who love their jobs is helpful for driving service quality and customer satisfaction. But for those who are innovating or working on complex problems, higher engagement may be relatively trivial, and a degree of dissatisfaction might be more useful.
Undermining the benefits of negative thinking. While it’s true that positive mindsets bring openness and creativity, it’s also true that more critical ones can bring focus and attention. People who are put under moderate amounts of stress tend to become very focused and target-driven which can help to drive positive performance outcomes. Accordingly, research has found that people experiencing negative moods are often more persistent than those who are in more positive mindsets. So while the predominate philosophy in many companies is to focus on the positives to boost engagement and employee morale, we should be careful not to overlook the benefits of negative thinking. For example, defensive pessimists often perform better because they prepare more and try harder; and those who question themselves more often tend be more motivated to achieve their goals.
In short, we need to take a more balanced view of employee engagement. Managers need to think about how to create just enough tension in their workforce in order to trigger healthy competition and intrinsic motivation. A “one size fits all” approach to employee engagement is unrealistic, and the common understanding of engagement as “happiness” is too simplistic.