A guide to setting goals and targets for employee engagement

Regardless of where your organization stands, movement on the drivers most impacting engagement is always possible and is “the right thing to do” for the workforce. When it comes to incentivizing engagement through targets, however, the above goals tend to get confounded for the following reasons...

There are exceptions of course, for companies who know they have some fundamental issues or those that are prepared to make big cultural shifts/changes (e.g., companies undergoing a large acquisition). But even in those organizations, there will eventually be a leveling out of scores. In statistics, this is called 'regression to the mean', where a variable that is extreme on its first measurement will tend to be closer to the average on its second—and if it is extreme on its second measurement, it will tend to have been closer to the average on its first. For this reason, it’s rarely a good idea to set incentives or targets for employees based on actual engagement scores.

The critical drivers of engagement can vary by organizational demographics (e.g., business unit, function, region, level). Where some drivers might be within a manager’s purview, others might be specific to the environment, market, leadership team, etc. While actions might be taken on focus areas at all levels, it’s tough to hold individuals accountable for focus areas that reflect experiences beyond the employee group within their span of control.

Engagement incentives and targets can make it feel risky for managers to try new ways of acting on that very feedback provided by employees. For example, if I know I have incentive pay hanging on my engagement scores, I'm less willing to consider ‘outside the box’ thinking when it comes to trying new ways of working or my willingness to involve employees in the ideation process for identifying solutions. They make it more about one person's individual performance (i.e., on the target) and less about working as a team to improve work experiences for everyone.

Incentivizing engagement scores undermines the focus of collecting and using employee feedback for future-focused, positive development. Instead, it can lead to employee groups (e.g., teams, departments, locations) and managers feeling inspired or even incentivized to inflate their survey scores to present their group in the most socially desirable light (i.e., to make one's team "look good"). Perhaps more damaging, is that targets can also incentivize a group to view the feedback as a vehicle for making one's group look in need of more organizational attention and resources. In either event, engagement-based incentives do anything BUT promote candid employee feedback for the purpose of organizational, team, and individual betterment and development.

For these reasons, we recommend you focus performance/remuneration decisions on factors more directly tied to performance. Maintain the true intent of the engagement survey to be just about collecting candid employee feedback for how to improve work experiences for everyone.