In an old-school paradigm where management equals control, the concept of flexible work practices in the workplace might seem counterproductive – like a bone that a manager tosses to an employee every once in a while to keep him satisfied.

In yesterday’s workplace, flexibility for employees was uncharted and scary territory, a potential slippery slope into chaos that was perceived as harmful to a company. But the reality that is dawning on innovative managers is just the opposite. Businesses that wade into the waters of flexible work arrangements benefit not only in employee engagement and retention but also in increased productivity and profitability.

A 2011 study by Mercer found that flexibility is becoming one of the key factors of job selection and longevity, especially for women. In all, 61 percent of the respondents and 71 percent of the women polled said that flexible work arrangements were very important to their motivation and engagement. The same survey also revealed that 59 percent of the respondents worked for an organization that offered them some flexibility.

The British financial services company Nationwide is known for its wide array of employee options, including flexible hours, work from home, a compressed work week, annualized hours and leave policies that enable them to take time off to pursue interests outside of work. A widespread study of Nationwide’s workforce revealed that these relaxed parameters pay dividends for the bottom line as well as employee morale. Among the findings:

• Ninety-three percent of women returning from maternity leave stayed at Nationwide
• The  company has an employee turnover rate of 9.7 percent, compared to the financial-services industry average of 17 percent
• Nationwide saw a 50 percent increase in the number of female part-time workers and a 150 percent increase in the number of term-time workers. (Term-time is a work schedule that is aligned with school holidays, allowing employees to have unpaid leave when their children are on break.)
• Seventy-five percent of Nationwide employees indicated that they were very satisfied with their employer and the flexible options offered at the company.

“Today, many organizations still perceive flexibility as an aberration,” according to an article by Lisa D’Annolfo Levey of Catalyst. “They have cultures that support the old way of working. That old way was designed around factory production shift scheduling. We still think about the ‘typical’ workday and about rewarding people who work overtime. Organizations tend to be biased in thinking that the current way in which work gets done is optimal. The reality is that much activity that goes on in the name of work is far from efficient or effective. Those long hours don't always make sense - for people or for organizations.”

Businesses that are committed to offering true flexibility need to cultivate a culture of trust and communication that accompanies the new patterns of working. More than ever, says Kyra Cavanaugh of Life Meets Work, managers must be master connectors between people, since coworkers now often work in different locations or at different times but still must share a common vision.

 “In a world where business teams are increasingly virtual, managers must foster connections among disparately located employees,” Cavanaugh wrote on the Life Meets Work blog.  “A leader must be able to build relationships.”

Research shows the workplace flexibility doesn’t just yield more productive and more satisfied employees; workers who enjoy a flexible culture are also physically healthier.  A study in the 2011 issue of the Journal of Health and Social Behavior examined more than 600 employees of Best Buy both before and after the company instituted widespread flexible practices.

The research discovered that employees in the flexible environment report better sleep quality, more sleep (an average of 52 extra minutes on work nights), more energy, less stress and less obligation to work when sick.

“We have to stop thinking of our employees as worker bees and understand that they have a direct, monetary impact on our businesses,” said Cavanaugh. “Focusing on culture, making our workplaces more flexible, soliciting diversity of opinion, and letting go of face time are all critical to the survival of your business.”

Legendary movie producer and studio founder Samuel Goldwyn once said, “I’ll take fifty percent efficiency to get one hundred percent loyalty.”

That tradeoff might seem extreme for many of today’s managers and executives. But if your rush for productivity eclipses your efforts to inspire loyalty in your employees, you could be damaging the very foundation of your company.

The idea of loyalty lies at the heart of employee engagement; workers will never go the extra mile for an organization until they feel loyal to that company’s purpose and vision. But in an economy when bottom lines are viewed with increasing urgency and a typical American worker seems destined to change jobs frequently, many companies have dismissed the ideal of creating a workplace rich in employee loyalty.

A 2011 Metlife study reveals that even though employers think their people are just as loyal as they were three years ago, in reality more workers are thinking of changing jobs now than they were before the economy plummeted. More than a third of the employees polled told MetLife that they hope to have a new job within the next 12 months, and four in ten responded that it was likely they would find a job that matches their current experience and salary in the next six months.

Managers hoping to stem that coming tide must focus on improving employee communication and taking care of the details that help create a warm and welcoming workplace environment. While higher salaries can help, many of today’s workers have indicated that a sense of belonging and collaboration with the company’s mission are more important than remuneration.

An article written by Anne Berkowitch for Business Week indicated that this paradigm shift from financial to emotional is particularly striking among the “Millenials,” that 24-32 age group that will make up 60 percent of the workforce five years from now.

“Today’s employees value open communication, meaningful work, and connection to their company more than they do high salaries, as reported in the 2009 10th annual Deloitte Best Company to Work For survey,” Berkowitch wrote. “Employees who feel valued and engaged with what is going on in their companies are far more likely to stay longer than disengaged, slightly higher-paid employees.”

So how do employers inspire loyalty and help workers feel like they are part of a greater whole? One strategy is implementing an organizational social networking site that will foster employee communication and allow managers to keep their people in the loop. In an era where instant information is the order of the day, the companies who keep pace with that trend will be the ones with the most satisfied workforce.

Targeted employee assessments and frequent two-way meetings between managers and their employees will also prepare the soil for loyal workers, especially if decision makers listen to the input and make changes accordingly. Employees should have the opportunity to weigh in regularly on the changes that would make them feel a stronger sense of belonging to their company, and whenever possible those suggestions should lead to action.

It can even be as simple as saying ‘thank you’ or writing a thank-you note to workers who go the extra mile, said Kevin Sheridan, chief engagement officer at HR Solutions. The most loyalty-inspiring workplace dynamics will come when employees are sure not only that their contributions are valued, but that they feel valued as individuals.

“(Employees) want to know that they’re reporting to someone who cares about them as a person, and cares about their engagement level,” Sheridan told USA Today in a March 2011 article about the MetLife loyalty study.

The first three blog entries in this series addressed the three areas of employee engagement that deal with empowerment – confidence, autonomy and resources. This article, which looks at the importance of external discussion, begins our analysis of key areas of employee commitment.

Everyone has encountered one at a party before – a person whose small talk consists almost entirely of conversation about their job. A sort-of workplace evangelist, this person regales everyone he meets with stories of his company’s strategies and his role within that mission.

Such a guest might get a bit tiresome if you are seated next to him or her at dinner. But those employees are a blessing to their managers and a boon to their organizations. In fact, one of the most telling indicators of employee engagement is an eagerness to discuss the company with those outside its walls.

“External discussion,” as it is known in top engagement surveys, is so vital that innovative companies are doing more than just embrace employees who are known as promoters. They are actually recruiting “brand ambassadors” from within their building. As a recent article in “Inc.” magazine explains, the best publicity is often both homegrown and free.

“Brand ambassadors, or employee evangelists, are becoming an increasingly common way for brands to leverage their biggest asset—their workforce, of course—to reach new markets, generate buzz, and put a real face on the company,” wrote Eric Markowitz in the April issue. “They can be tweeters, bloggers, Facebookers—or they could just be the people you send to corporate events.”

The emergence of social media as an integral marketing tool has made it even more vital to identify employees who are adept at spreading your corporate message. In this plugged-in age, the workforce has endless opportunities to transmit information – good or bad – about an organization. While it may be tempting to limit employee exposure to social media, companies who identify ambassadors and equip them as de facto marketers are turning a potential distraction into a cutting-edge asset.

Brand ambassadors should be people who are enthusiastic about both the company’s message and social media, and they should also be connected with a network of other tech-savvy individuals, according to Ron McDaniels, an author and speaker on marketing techniques. "The first thing you want to know is if they're passionate, and give them information that they need,” he said. “Ask, ‘Who are your power players, and how do we tell them more stories?”

Of course, a vital part of developing a vibrant workplace culture is creating the kind of excitement that would make people want to talk on at a dinner party or send positive tweets. Employee satisfaction and understanding of the corporate mission is more important than it’s ever been, yet a 2010 Forester Research study found that many companies are failing to create evangelists within their companies.

Among the findings of the study, which surveyed 5,519 information workers in the U.S. and Europe, was the fact that 49 percent of the workers were rated as detractors for their companies, and only 27 percent were considered promoters. Those labels were determined by the respondents’ answer to the question:  “How likely are you to recommend your company’s products or services to a friend or family member?”

When the above results were broken down, they revealed that directors, VPs and executives were promoters and workers and managers tended to be detractors. Encouraging strategic use of social media and ramping up communication at every level of an organization could help remedy this top-down imbalance.

“In case you're wondering if you should allow employees onto social networks, try this fact on: workers who use social media are among the most positive,” wrote Josh Bernoff in an Ad Age article about the study. “Forty-eight percent would strongly recommend a company's products and services and only 22 percent were detractors.”

For those in the top echelons of a company who believe strongly in its mission, the challenge is to create a culture that makes the benefits of the organization evident to all who draw a paycheck from it. Last week in Harvard Business Review, Art Markman took the position the best companies – those in which employees promote their employers in a natural and winsome way – are the companies that cast themselves as neighborhoods, but with some elements of a hierarchy.

“A successful company has to have elements of a good neighborhood,” according to Markman. “When you walk down the street near your home, you might pick up some trash or set a neighbor’s flowerpots upright after a storm. You do that because you think of your neighborhood as an extension of yourself. You put in effort for the greater community, of which you are an essential part. Likewise, a company cannot succeed unless employees start to think of themselves as part of something bigger than themselves.”           

Providing resources even when the cupboard seems bare.

It seems like an obvious statement: No one can do their job properly without the necessary tools. But in this rocky economic climate, ensuring sufficient resources for employees is trickier than it sounds.

During a national economic downturn, astute managers know that employee engagement must be valued more than ever. As companies are forced to trim their budgets and even resort to layoffs, they must place a high premium on keeping the remaining employees dialed in to the company’s mission so that they can rebound and thrive. But creating a vibrant climate for employees means giving them sufficient resources to do their jobs with excellence.

That situation creates a conundrum; Cut the budget, or provide employees with resources? In making those choices, decision makers must bring equal doses of creativity and honesty to the table, along with an acute awareness of their employees’ day-to-day challenges.

In a recent AIM study on employee engagement, 19.8 percent of employees who were planning on leaving in the next 12 months said it was because they did not have adequate resources to do their job.  In many of those cases, the company might have truly been unable to provide what employees needed because of financial difficulties. But as they lost their best people, their productivity issues suddenly became a lot more serious than numbers on a spreadsheet.

“It’s tempting to assume that your employees are grateful just to have a job and would never dream of leaving during a recession, but that would be a costly mistake,” says an article by Canada’s The Alliance of Sector Councils. “A 2008 study published by the University of Wisconsin–Madison found that downsizing can actually lead to a higher rate of turnover, which can leave organizations without the critical people they need to keep operating through the tough times. Although they may not be actively looking, unhappy employees are usually open to new opportunities if they present themselves.”

With an unlimited budget, the path to keeping your best people happy in their work would involve providing them with whatever resources they needed to excel. But that ideal must be met with a dose of economic reality, and that blend will become palatable when managers can keep the lines of communication with their people wide open.

If bottom-line realities make it impossible to provide the top resources, then managers should tell their employees about that tension, revealing the difficulties they face at the budget table, and also projecting a vision for a future in which higher profits lead to overflowing employee toolboxes."

Be open and honest with your employees—share both what you know and what you don’t know about how the economy is affecting your business,” the TASC article said. “Whatever you do, don’t rely on email for communicating difficult news. It lacks tonality and can seem very cold and uncaring. Have regular staff meetings so employees have an opportunity to ask questions. And if you don’t know the answer to a question, it’s okay to say so.”

Once the door of communication is open, the other key to making much out of little in the area of resources is creativity. Just as a mother can stretch the contents of her pantry to feed her family when funds are tight, a good manager can give an employee what he needs to succeed even if it means ‘pinching pennies.’

To be creative in providing resources, managers must know the inner workings of the company so well that they can conceptualize new ways to set the stage for excellence. Some of the most groundbreaking inventions in history have risen out of scarcity, and the company that sees a downturn as an opportunity is the company that will thrive when others are just trying to survive.

An old adage says that “A workman is only as good as his tools.” That statement is true in corporate America, but authentic communication and creativity can expand that statement to ring true even when those resources aren’t easy to come by.

Daniel Pink, the New York Times bestselling author behind the book Drive: The Surprising Truth About What Motivates Us, is a proponent of autonomy for workers. But Pink believes that today’s changing workplace demands that employee freedom be viewed through a new lens.

In the old top-down, conformist corporate culture, managers would, in a sense, lengthen employees’ leashes to improve morale and boost output. But as the emphasis in many companies has shifted from productivity to creativity, Pink maintains, autonomy has become less of a perk and more of a necessity.

“Most 21st-century notions of management presume that, in the end, people are pawns rather than players,” Pink wrote in Drive. “Management still revolves largely around supervision, “if-then” rewards and other forms of control. That’s even true of the kinder, gentler Motivations 2.1 approach that whispers sweetly about things like “empowerment” and “flexibility.” Indeed, just consider the very notion of “empowerment.” It presumes that the organization has the power and benevolently ladles some of it into the waiting bowls of grateful employees. But that’s not autonomy. That’s just a slightly more civilized form of control.”

To illustrate a new approach that eschews managerial control for authentic autonomy, Pink points to companies like Meddius, a Virginia-based firm that develops software systems for health care providers. Meddius is a ROWE, or results-only work environment, in which employees are held accountable not for their presence in the office or even the number of hours worked, but solely for the quality and effectiveness of their work. The ROWE model works well for Meddius, said CEO Jeff Gunther, because the company’s success hinges on employees having the time and space to operate at the height of their creativity.

“Management isn’t about walking around and seeing if people are in their offices,” Gunther told Daniel Pink. “It’s about creating conditions for people to do their best work.”

Recent research backs up the belief of executives like Gunther that the best companies are the ones marked by employee independence. A 2011 University of Minnesota study surveyed 600 employees of a Minnesota Best Buy before and after a radical ROWE initiative was introduced. The results showed that ROWE reduced turnover in that store by 45 percent.

“ROWE redirected the focus of employees and managers towards measurable results and away from a set work schedule and location,” said a press release about the study. “Employees could routinely change when and where they worked without seeking permission from a manager or even notifying one.”

Results alone do not inspire loyalty from employees, but a system that values each individual’s distinct talents convinces people of their unique contribution to the bottom line. When they are given that brand of autonomy and they routinely do their best work, they are likely to stay put. Several studies even show that employees value authentic autonomy more than higher wages.

Companies wishing to broaden their employee autonomy must plan for their corporate freedom carefully, meeting with each employee and determining what specific results are expected from that person. Expectations must be clearly communicated so that the autonomy improves the quality of the relationship between the employee and the company and helps expand the company’s horizons.

Pink, in his treatment of the subject of autonomy, proposes that the term “management” will one day be discarded, as employees step out from being “managed” into a more spacious role that allows them to contribute to the company’s greater good and let them be their best at the same time.  

This is the second in our 25-part series examining the key areas of any good employee engagement survey. Today’s essential ingredient to workplace engagement is confidence.

Confidence is the fuel that allows a company to accelerate

A story has endured from the days when Thomas Edison was developing the first light bulb. One day Edison handed an early model of the bulb to a young boy who was assisting him. As the boy was carrying the bulb up the stairs, he dropped it and it shattered. It took Edison and his team 24 hours to develop another bulb, and when it was finished, Edison approached the same boy and handed him the bulb.

That simple gesture from one of America’s most brilliant scientific minds illuminates a crucial aspect of employee engagement in the workplace – confidence. Edison understood that the development of that apprentice’s confidence hinged on the teacher’s response to his mistake. The bulb was important, but convincing the boy that he could move forward with strength meant even more.

At the heart of employee confidence is the concept of self-efficacy, or the degree to which employees believe they can succeed at a certain task. According to Albert Bandura, the legendary psychologist who is considered the father of the study of self-efficacy, four factors lead to a person’s confidence in his own ability: mastery experiences, modeling, social persuasion and stress resilience. When a manager can help create those types of experiences in a workplace, it goes a long way toward boosting employee confidence

Sowing mastery experiences in a workplace means giving employees the tools and freedom to master necessary skills and then seek further challenges. Bandura describes it this way: “People with high assurance in their capabilities approach difficult tasks as challenges to be mastered rather than as threats to be avoided."

Modeling is a persuasive route to greater employee confidence because a person becomes more self-efficacious when they see someone else successfully implement a task. Vicarious modeling is particularly effective when the person doing the modeling is close in age and ability to the one who is watching. For example, a novice tennis player would not gain as much confidence from watching Andy Roddick as from a player who is just a step or two ahead.

Persuasion is a key component in the infusion of confidence in the workplace, whether it comes in the form of verbal encouragement or reassuring actions like the one attributed to Thomas Edison so many years ago. Managers can help build self-efficacy in their employees by convincing them that they can be successful, even at jobs that seem to be beyond their abilities.

Finally, a healthy work environment is one in which stress and anxiety are downplayed and even trials are absorbed into the larger mission of the organization. Employees who are given the latitude to seek mastery and know that they can continue that pursuit even after a failure develop the resiliency to become valuable, long-term contributors to the mission of their company.

Imagine a company populated with people characterized by self-efficacy, employees who take risks with confidence, backed up by past mastery, consistent modeling, persuasion and a resilient climate. The result of such a commitment to confidence would be excellence and unity in the pursuit of that company’s most essential goals.

A few months ago Dan Walter of the popular “Compensation Café” posted an interesting piece called: “Are Employee Engagement Surveys Like New Year’s Resolutions?” Walter commented on the unusual number of engagement surveys that show high percentages of employees ready to jump ship: “I can’t help but wonder if some of these employees who are ready to leave are the same people who in December 2009 told major media surveyors that they made a New Year’s Resolution to lose 20 pounds and start exercising 3 times a week.”

It’s an interesting thought. Walter believes many of the people who fill out employee engagement surveys are like those that resolve to get in shape after New Year’s but never actually enter a gym. He refers to them as “Resolutionists”, and he thinks organizations and analysts fail to factor for this phenomenon. We suspect he’s right on both counts, after all there are thousands of surveys out there but very few that are validated, and fewer still are large organizations with the in-house expertise necessary to properly interpret survey results.

By the same token, there are many employers who resolve to do something about employee engagement and never get much beyond the survey stage. This is an even bigger problem than “resolutionist” employees.  It takes time and care to know which survey instrument to use, how to tailor and design it for your organization and how to analyze and interpret the results into a prioritized action plan. As one of Walter’s readers commented, “never ask a question whose answer you are unwilling to address."

Employee diagnostics can yield powerful insights for improvement if done correctly and a well designed employee survey can go a long way toward helping employers assess the real intentions of their employees. If misinterpreted though, they can send an organization on the wrong path, or worse, breed cynicism and disengagement.