How Can ROI Methodology® Help In Promoting The Employee Engagement Of An Organization?

Engaged Employees know what is expected from them, and this helps them to perform better. Employee engagement and wellness are the responsibility of every leader and is considered an integral part of business strategy. 

However, it is increasingly clear that unhealthy and unengaged employees are a drag on productivity and innovation. As a leader, you need to understand whether your input towards employee engagement is resulting or to what extent the employees are feeling encouraged or satisfied with their job.

How you can measure Employee engagement for your business organization?

Employee engagement is critical to measure and the success factors depend on various levels. From executing a business strategy to financial performance, employee productivity, and the ability to create innovative products and services 

ROI Methodology® can help you create, measure, and prove the extent of your employee engagement, its success, or its failure. The Methodology will also help you detect the correct steps and functions for strong workplace culture. 

Figure 1: Macro Versus Micro View

Employee engagement is critical to business performance and a success factor on many levels, from executing a business strategy to financial performance, employee productivity, and the ability to create innovative products and services. Many comprehensive studies have been developed to show the business impact of engagement. 

These studies focus on macro-analysis, as shown in Figure 1. However, the foundation is based on a logical and intuitive assumption about engagement. Logically, executives want their employees engaged, and this causes them to invest in, and support, this important area.

1. What we know from Logic and Intuition

• People are necessary
• Engagement is necessary
• Disengagement is disastrous

2. What we know from Macro-Level Research

• Studies conducted across the organization
• Some studies involve multiple organizations
• Engagement drives productivity, sales, quality, safety, retention, customer satisfaction, innovation. . . . and many others

3. What we know from ROI Analysis

• Many ROI studies on engagement
• Ultimate evaluation
• CEO/CFO-friendly
• Used to increase investment in engagement

Start the Employee Engagement Program with the Initial Analysis

At the heart of ROI analysis is the variety of data collected throughout the process and reported at different intervals. Most employee engagement programs use logical steps of value, and their sequential use can be linked to a variety of guidelines and models.

The initial Analysis starts with WHY: As a leader, you must question yourself Why you want to do this Employee engagement program? Why should you take certain challenges to bring change to your organization? What exactly are the loopholes and what measures can fill the gap? 

The Initial Analysis determines the needs:

LEVEL 5-The Payoff Needs: 

The payoff needs to identify opportunities with your employees to make money, save money, avoid the cost, or do some greater good. 

LEVEL 4-The Business Needs: 

Determining the business needs will help you to select specific areas to assess the employee's situation. It will help you figure out the specific areas with which they may need assistance.

LEVEL 3-The Performance Needs: 

The step describes the problem or opportunity for how your employee engagement program can impact measures and identify the solution or solutions for your organization. 

As a leader you can use the following approaches to delve deeper into the analysis:

• Examine the data and records of the employees.
• Initiate the discussion with the clients about the employees.
• Use benchmarking from similar solutions.
• Use evaluation as a hook to secure more information.
• Involve others like Team leaders and managers in the discussion.
• Discuss negative sides like ill behavior/ unpunctuality in other places.
• Discuss the consequences of not having business alignment.

LEVEL 2-Learning needs: 

Determining the Learning needs can ensure all parties know what they need to do and how to do it as the performance is delivered. 

LEVEL 1-The Preference Needs: 

The preference needs will help you to determine the process, schedules, or activities for the employee engagement programs.

Setting Objectives according to your need analysis

For a  successful Employee Engagement program, you must set objectives while planning for the program. Properly set objectives will help in extracting better program clarity and set strong links for evaluation. 

The Employee engagement Program Objective is usually set in 5 Steps:

• Reaction Objectives
• Learning Objectives
• Application Objectives
• Impact objectives
• ROI Objectives

The ROI Objective will help you to define the overall employee requirements, how to address their pain points, make them effective in their key roles. 

For Example:

Businesses can set the value at:

• Same level as other investments; usually at 15% ROI
• Slightly above other estimates at 25% ROI
• Break-even with the expectation of getting a return of the same amount that you have invested in your project
• Return On Investment set at client expectations.

Note: Private sector organizations usually go with option #2; public sector organizations prefer #3.
Complete details on objectives are mentioned in our blog titled “A Detailed Analysis Of The ROI V Model”. It will help you to understand why objectives play an important role while planning for the program.

“This logical flow of data is appropriate for engagement as employees” - PATTI PHILLIPS
The logical flow of data helps to react to the engagement process, learn how to be engaged, apply and use engagement actions and concepts, and have an impact on their work. When the impact is converted to money and compared to the cost of the engagement program, the ROI is calculated.

Level 0- Input Data

The Input Data speaks about the volume, time, and cost of the Employee engagement program. As a leader you can include the number of people involved and the time of their involvement, representing a fully loaded cost profile. 

Level 1- Reaction and Planned Action:

The first category of outcome data collected is the perceived value of the concept of engagement (Level 1). At this level, a variety of key reaction measures are taken to gain insight into the value, importance, relevance, usefulness of the engagement programs, and the intent to “engage” more with the team and the work.

Level 2- Learning:

As the engagement program is implemented, new information is acquired and new skills are learned. This level of measurement (Level 2) focuses on the changes in knowledge and skill acquisition. Some engagement programs have a high learning component, such as major changes in job design and workflow. Others may have a low learning component, such as needed brief engagement actions and behaviors.

Level 3- Application/Implementation:

Application and implementation (Level 3) are key measures that show the extent to which employees are engaged, the behavior has changed, and job performance has improved. This data reflects the extent of actions taken, skills applied, habits changed, and new processes are initiated, because of the engagement programs.

This is one of the most powerful categories because it uncovers not only the extent to which the employee engagement programs are successful but also the reasons for lack of success. At this level, barriers and enablers to application and implementation are detailed.

Level 4: Impact Data (Tangible and Intangible)

As employees become more engaged, consequences are monitored. These can be described in one or more measures in the work unit representing output, quality, time, and costs.

This level of data (Level 4) reflects the specific business impact and include measures such as sales, production, services delivered, errors, waste, accidents, retention, costs, innovation, job satisfaction, and customer satisfaction—that have been influenced by the engagement program. A direct link between the business impact and the engagement program must be established to have credible results. 

This requires using a technique to isolate the effects of the program from other influences that may be driving the same measure. Answering this question is critical: How do you know it was the employee engagement program that caused the improvement and not something else?

Level 5: ROI: 

This level of measurement (Level 5) compares the monetary value of the business impact measures with the total cost of the program. ROI is the ultimate level of accountability and represents the financial impact directly linked with the program, expressed as a benefit-cost ratio (BCR) or return on investment percentage.

Final Thoughts

Whether it is to measure the performance of employees, determine sales, have look at the production, increase the services delivered, or to increase their knowledge an employee engagement program always motivates them into performing well. 

It also gives the leader insight into the psychology of the employees, what they thinking, are they happy with the company policies, is there something they want to change, and so on. 

To quote a few links from an article written by Patti Phillips titled Proving the Value of Employee Engagement: “Every employee engagement program should be evaluated in some way, even if it’s only collecting reaction data from those involved. The challenge is to collect additional data at higher levels and to do so only when it is relevant and feasible. Level 3 evaluation, which shows how well employees are engaged in the workplace, is very common with standard and customized engagement surveys. If the cost of the program increases, sponsors may ask for an impact (Level 4) or even ROI (Level 5) evaluation of the program.” 

References:
https://roiinstitute.net/proving-the-value-of-employee-engagement
https://roiinstitute-india.com/blog-detail/a-detailed-analysis-of-the-roi-v-model