Employee Experiences, NOT Engagement, Found to Impact Outcomes 100% of the Time

If your organization is solely focused on employee engagement, you’ll want to read on. If you aren’t focused on management, job fit, or senior leadership, you’ll want to read on. If you want to find the secret to improving your organization’s bottom line (e.g., sales revenue, percent to budget metrics, and customer and patient satisfaction), you’ll want to read on. Spoiler alert: it’s NOT by having tunnel vision on just employee engagement.

In a nutshell, SMD conducted a study to examine key drivers of busi­ness outcomes, as well as highlight which types of out­comes are most influenced by employee experiences. Key findings are below:

  • The top drivers of outcomes were Management, Job Fit, and Senior Leadership – with Management being the most consistent driver of outcomes.
  • Engagement was not a strong driver of customer satisfaction nor Employee Performance measures.
  • While Engagement was predictive of outcomes 32% of the time in this analysis, this was largely driven by the connection with Voluntary Turnover (67%). When turnover is removed from the equation, Engagement was a driver on average only 21% of the time. The connection to turnover is not surprising given that the Engagement metric consists of items that rate the employees’ level of commitment to the organization (e.g., I would like to be working here three years from now). Commitment (or lack of) has long been found to be linked to subsequent turnover.
  • These results highlight the fallacy of the common notion that Engagement equals performance, be that at the organizational level or even the individual employee level.

The results are in table 1. Read all about the study here.

criterion table

Engagement’s Role & Best Use

Are we saying Employee Engagement doesn’t matter? No. SMD strongly recommends clients use Engagement in a realistic and appropriate way though. Cer­tainly, measure it in an employee survey, but use it as a leading indicator of potential turnover, or as an outcome that can provide a good gauge of employee morale. However, SMD highly encourages clients to utilize key business metrics that matter to the organization as the focus of their survey analytic work. This allows for an accurate and business-focused approach to priori­tizing the follow-up from an employee survey in a way that will benefit not only the employee experience, but also the whole organization (i.e., improve your organization’s bottom line, don’t just check the employee-survey box).

Businessman hand giving five star rating, Feedback concept, VECTOR, EPS10

Want to Increase Your Employee Survey Scores?

As the calendar is getting ready to turn once again, are you reflecting upon the outcome (or lack thereof) of your employee survey for yet another year? Good news: this blog will unveil the specific actions that lead­ers have taken to not only drive significant increases in their employee survey scores (on average 0.10 on a 5-point Likert Scale), but also business outcomes such as customer satisfaction; productivity; voluntary turnover; sales; and safety. We conducted this analysis and want to let you in on the secret because we are focused on driving results, not just checking the survey box.

The following list represents the most impactful actions from our catalog of best practices honed over a decade of work and research. These actions have been shown to directly impact the employee experience as well as business results for numerous organizations. We’re giving one tip per category here but see our white paper for several more.

Senior Management

Your employees should have regular contact with your immediate manager, as well as other senior management. Invite senior leaders to periodically attend staff meetings and provide updates to your team.

Career Development

Create career development plans with employees that have specific action steps. Align indi­vidual development with the needs of the organization. Make sure that employees under­stand that their development is also their responsibility and take ownership of the process.

Customer Focus

Invite a member of the Customer Satisfaction or Quality/Service team to your staff meeting to share customer information/data. Focus the conversation on both the good news and the bad news (e.g., complaints, dissatisfaction, positive feedback).


Reserve time at the end of all staff meetings to recognize the performance of direct reports and allow employees to recognize their peers for outstanding performance.


Identify effective teamwork behaviors for your team. Develop with your team the target be­haviors that will lead to improved teamwork. Monitor and reinforce appropriate behaviors.


When an employee consistently fails to deliver adequate results, he/she must be held ac­countable. Provide process feedback and coaching along the way to achieving a goal or task. If their performance is still not acceptable, seek advice and counsel from your HR partner to develop a performance improvement plan for the under-performing employee.

Job Fit

Help your employees gain new experiences (e.g., project management) that align with his/her career development goals and provide new challenges.

turnover blog image

Can Turnover Risk Be Used as a Proxy for Actual Turnover? We Have the Answer

You would probably jump at the chance to impact your organization’s bottom line by reducing the voluntary turnover rate of high performing employees (i.e., reducing the number of good employees who choose to leave the organization). Are you scratching your head to figure out why employees are leaving in the first place? You’re not alone! So, we set out to figure out which key drivers typically emerge with turnover risk as an outcome and how that maps to subsequent analysis of actual turnover behavior.

In a recent study, we looked at the five most recent clients with which we had conducted analytic approaches and tracked the differences in key drivers between turnover risk and voluntary turnover.

But first, turnover risk defined. Organizations can examine how the various topics on the employee survey (management, communication, compensation, job fit) drive employee commitment. We refer to this as “Turnover Risk” – the likelihood that an employee may voluntarily exit the organization. For example, how an employee feels about job fit may be related to whether they would like to be working for the organization 3 years from now – both topics that may be covered in the employee survey.

Now, see figure 1 below.

Figure 1. Turnover Risk vs. Actual Turnover Drivers

turnover chart2

TR = Turnover Risk; Term = Voluntary Turnover
Predictors are rank ordered; 1 = Strongest predictor of the respective outcome
Analyzed drivers across 5 organizations, representing more than 150,000 employees
Commonly measured categories that were not found as drivers of Turnover Risk or Actual Turnover were: Accountability, Staffing, Tools & Resources, and Wellness

Numbers indicate statistically significant drivers of either Turnover Risk or Actual Turnover. Green when the same, red when different. Turnover Risk is measured by two items –

“I would like to be working at this organization 3 years from now.”
“I would feel comfortable referring family and friends to this organization for employment.”

Turnover Risk was consistently the strongest predictor of actual turnover, but the drivers were often different when examining Turnover Risk versus Actual Turnover. SMD found that while there were some consistently predictive topics across the two outcomes, many other topics differed in what drove commitment and what caused actual turnover. For example, SMD found that management was a strong predictor of actual turnover, but not usually a driver of turnover risk. We also found that when compensation was a driver of turnover risk, it did not actually cause an employee to ultimately leave the organization. Job Fit and Senior Leadership were among the only topics that were consistent drivers of both turnover risk and voluntary turnover. These key topics address how an employee feels they are suited for their current role and their impressions of senior leaders in the organization.

As we always say, predictive analytics is not a one-size-fits-all approach. Stay tuned for our next blog post to learn how to investigate turnover risk and voluntary turnover, with an employee survey, at your organization.


ICYMI: HR Developments Through the Decades

We recently read an interesting article, “HR’s Epic Journey,” in Human Resource Executive’s 30th anniversary issue, and we thought the insights offered by several CHROs were worth repeating. The trends they pointed to aligned with the ones we have spoken about before as well. You may read the full article here.

HR as a Strategic Business Partner

Executives want to believe in the value of their employees, but often struggle to understand how the HR function drives value through the organization’s people. HR’s value isn’t often seen or seen as an expense on a balance sheet. Strides are certainly being made by some but there is still work to be done. See what some CHROs are saying about it …

“The transformation of human resources from more or less an administrative, strictly employee-relations function to more of a strategic business partner” is the most dramatic change that Johnna Torsone, longtime executive vice president and chief human resources officer at Pitney Bowes, says she’s witnessed in her 27 years dealing with employment and HR issues at Pitney Bowes.

“Although it’s almost impossible to predict exactly how technology will alter the workplace over the next 30 years, the HR executives interviewed for this article mostly agree that the skill the CHROs of the future will need most is business acumen.”

“While it’s hard to imagine which gadgets and robots will revolutionize the workplace by 2047, the experts agree that the concept of the modern HR executive as a key business partner is here for good.”

Good news: SMD can get you a seat at the table! With the advanced analytical approach from SMD, you can clearly demonstrate your department’s value, and track improvement in business metrics eradicating the “What is the value?” question.

Solving Business Problems, Not Checking Boxes

Is HR impacting their organization’s bottom line? Most likely. Are HR leaders demonstrating this and illustrating their value to executives? Hardly. This can change. Shifting the focus from typical HR outcomes of interest such as employee engagement, or job satisfaction, to business outcomes such as sales, customer satisfaction, financial performance, and employee performance is the first step. HR leaders need to go beyond slicing and dicing HR data and start demonstrating direct connections to business metrics that matter most to executives.

“Mark Berry, vice president for human resources at CGB Enterprises, says the biggest boost for the HR profession has been the ability to use data to show the specific effects of various policies or programs on the bottom line.”

“Since arriving at CGB a couple of years ago, Berry has increased the frequency of employee surveys but targeted them to solve problems such as high turnover rate.” (Special note: Mr. Berry is an SMD client, utilizing the SMD consultants and patented technology to solve these business problems.)

“In a service-based economy, people and talent management has become more critical to business success than the other costs of goods.” – John Murabito, executive vice president for human resources and services at Cigna

“In the last 10 years, the focus has been on strategy … how do you take an organization that is not performing well and help it to be great.” – Darryl Robinson, executive vice president and chief human resource officer at Dignity Health

By utilizing our expertise in data integration, surveys, and the most advanced analytics, all delivered through our patented reporting and action planning platform, we’ve maintained a remarkable track record of improving business outcomes (e.g., voluntary turnover reduction) for our customers. So, we’re willing to put our money where our mouth is. We recently introduced results-based pricing. That means our price is based on the value/results we deliver. Essentially, this approach acts as a guarantee to deliver results. That is how confident we are that our approach truly yields results!


The Employee Survey: A Strategic Tool vs. Engagement Barometer

Are you simply using your employee survey to measure engagement? How do you demonstrate the ROI from that approach? What if you instead use your survey to connect the employee perspective to business outcome data, such as financial performance, turnover rates, productivity numbers, and any other metric that the C-suite is using to evaluate company performance? If your current employee survey is not predicting critical outcomes to your company, your organization is potentially wasting valuable time and money on initiatives that will not impact business outcomes.

We’ve created a how-to guide to help you do just that. Yes. It’s possible to strategically use the employee survey to show ROI and improve business outcomes at your organization!

HOW TO: Think Strategically About Survey Content & Administration

Work Backwards: Go into a survey initiative knowing the business questions you want to answer and what the ultimate outcomes or goals of the survey should be. Think through the following:

  • What questions are being asked across the organization?
  • What are leaders hoping to understand?
  • What organizational issues are concerning to leadership?

Easy Peasy Access: Surveys should be accessible online, through a computer, tablet or mobile device at home or in the office, to ensure broader reach and greater participation rates. By doing so, you’ll achieve high participation and ultimately a fair representation of all employees. And, the turnaround time for analytics is greatly reduced, meaning your organization can move from survey to action in a much shorter period.

HOW TO: Connect Employee Survey Data to Business Metrics
(to prioritize organizational follow-up & solve common issues)

Show Me the Money: Advanced analytics that link employee scores to real business outcomes allow for the prioritization of time and resources in response to the employee survey results. This can also allow for a dollar amount to be placed on employee attitudes by demonstrating the connection between the employee experience and the organization’s performance.

CASE STUDY #1: Link to Bottom-Line Metrics

SMD helped a client link its employee survey to the following business outcomes: employee commitment (precursor to turnover), actual turnover rates, ROI metrics, and customer satisfaction scores. This linkage allowed the organization to prioritize around key topic areas, provide managers with specific scores on these key drivers, and direct follow-up and action planning. This approach is outlined in a graphical plot called a HeatMap® (below), which allows leaders to quickly see the attitudes that are key drivers of results and prioritize improvement efforts in these areas.

Happy businesswoman with colleagues in the background

CASE STUDY #2: Understanding Turnover

This is a pain point for everyone, right? SMD helped a client understand key employee experiences that were leading to voluntary turnover among their staff. By identifying 1) what employee perceptions led to turnover and 2) where in the organization employees scored low on these key drivers, this organization created targeted follow-up directed at the most at-risk work units. In a year’s time, they reduced turnover by 24-28 percent across the organization, saving an estimated $8 Million. Learn more about this case study in our recorded webinar; click here.

And, if you’re still not sure if your employee survey is up to snuff, take this quiz and see where you land.

engagement barometer image

employee turnover

And the Survey Says …Study Examines Impact of Engagement on Business Results

Employee engagement is, without a doubt, one of the top buzz phrases in the world of HR. Has anyone stopped to look at the actual research to see if this singular focus on engagement is warranted though? We set out to determine, through a comprehensive examination, which employee attitudes and experiences, as measured on employee surveys, are connected to business metrics that matter to our clients. The goal of this research was to assess how often each of the most commonly measured employee attitudes was found to be a statistically significant driver of business outcomes. In a two-part post, we’ll outline the research and the reaction of others to it. Check out what John Sumser of HR Examiner has to say about it.


When considering the lack of consistent results connecting engagement to business outcomes, organizational leaders would be remiss to blindly trust that engagement will certainly lead to better business outcomes. Further investigation is critical in determining whether engagement is a driver of business outcomes across various organizations.


We compiled the results of our structural equation models for each client and determined which survey categories were found to be key drivers of their business outcomes.


The clients included in this study represent a variety of industries including healthcare, non-profit, retail, manufacturing, and professional services. The organizations also range in size from less than 100 employees to several hundred thousand employees. We examined data across nearly 30 organizations and over a half a million employees.


Across a large subset of our clients who have administered employee surveys in the past 18 months, engagement was a key driver of their business outcomes only 28% of the time (less than a third!). That means if these organizations had solely focused on improving engagement, they would have put forth time, effort, and resources to something that would not provide any bottom-line improvement 72% of the time.

study table updated


One of the most important findings is that none of these categories matter all of the time for every outcome across all organizations – there is no silver bullet that works for every organization. Each organization should use analytics to determine which aspects of their employee experiences are most critical to their business outcomes.


In general, we do not disagree with the measurement of engagement in an employee survey, or its use as a gauge of overall employee morale. Its position, based on objective, advanced analysis, is simply that focusing so narrowly on one metric as the end-all-be-all of employee experiences could be a huge misstep for organizations.

survey image

How to Remain Union-Free with Employee Surveys

Organizations must be proactive about remaining union-free because the NLRB has made unionization attempts a question of WHEN and not if. The employee survey is the perfect opportunity to assess your level of readiness but, keep in mind, not all surveys are created equal.

Typical employee survey vendors will claim they have a “union vulnerability” measure to warn of unionization risk – but be careful – these measures are NOT validated and are by no means any type of guarantee of avoiding union risk. In short, measures of vulnerability have limited value.

Can Your Leaders Win?

SMD partnered with an organization that has more than 35 years of keeping organizations union-free (IRI Consultants) to establish proprietary items that assess the level of proactive labor prevention skills and tell you whether your leaders have the skills to win union elections and keep unions out in the first place.

The five key factors they identified are below. It’s critical to make these proprietary indices a part of your annual employee opinion survey.

  1. Management campaign skills
  2. Union-free environment
  3. Effective communication
  4. National Labor Relations Act knowledge
  5. Union vulnerability

Don’t Let Information Sit Idle

Including the items in the survey is a great first step. Don’t stop there. Be sure you have a tool in place to view the results for these key assessments at once so that all leaders may begin taking action organization-wide and locally. It’s ideal to have training content specific to the development needs that can be immediately launched from the action planning tool. Otherwise, you’ve spent time and money on a survey and aren’t directing anyone in the organization to actually take action. We want you to see results, not just reports on your desk (because one you can tout to the C-suite and one you cannot).

For a deeper dive view our white paper here.


Employee Surveys: More is Not Necessarily Better- A Pulse Survey Strategy that Makes Sense

The annual employee survey is under fire because leaders think it doesn’t work well and has little to no value. At the same time, there are thought leaders and vendors purporting that doing MORE of them is the answer!? Our view: strong disagreement. Adamant about results and ROI, we are providing some guidance on when and how to conduct pulse surveys in this post. But, let’s first start with an analogy for any of you monthly pulse-sayers.

Is Continuous Listening to Your Body Effective?

Consider a simple analogy that most anybody can probably relate to – weight loss. Let’s say you set a personal goal to lose 20 pounds over a three-month period. That seems aggressive, but reasonable. Now, by using the same logic as “continuous listening,” you would weigh yourself at least twice a day, every single day. You don’t have to do anything other than weigh yourself more frequently – it can be called “continuous listening to our bodies.” If that is all you do for the next three months, it’s probably safe to say that you won’t meet your goal of losing 20 pounds. The point? Measurement (or listening) by itself is not the desired outcome.

So, continue with the analogy, but with our four steps for employee surveys as the framework: (1) Listen to employees to uncover how you can help the business; (2) Diagnose drivers of business results; (3) Take action to improve those key drivers; and (4) Demonstrate impact. Using this approach, our recommended plan would be as follows:

  1. Listen to your body – Take a baseline measurement and weigh yourself. Let’s say you weigh 200 pounds and want to lose 20 pounds (target weight of 180 pounds).
  2. Identify the drivers of being overweight – Identify root causes of your current weight. For example, you are only working out one day a week and eating no breakfast, a fast-food lunch, and a large dinner on most workdays.
  3. Take action to improve those key drivers – Build an action plan and execute against that plan. You decide to work out three days a week and start eating balanced meals, which include eating breakfast and packing a healthy lunch every day.
  4. Demonstrate impact – Measure to assess the impact of the plan and make adjustments to your action plan for the next three months. At the end of three months, measure yourself again to see if you met your goal of losing 20 pounds. Imagine that you lost 15 pounds and feel much better. At this point you could set a new goal, revisit root causes and make adjustments in your action plan. You know what you did was working since you lost 15 pounds, but you decided to increase your workout routine of three days a week from 45 minutes to an hour, as well as reduce the number of meals eaten out during the weekend.


SMD has found that clients perform best on business outcomes and survey results when they survey annually and in alignment with their fiscal year so that the survey becomes a business process and not an outlier event. A check-in pulse survey at the mid-year point is useful but only if it is going to be used strategically. Just doing a pulse to see if a score is moving will make employees less likely to take the next survey that is asked of them. In the weight loss example, you should probably measure your weight a time or two between the baseline measurement and the target date, but build those check-ins (pulses) based on a strategy. Maybe a once a week weigh-in to check on progress makes sense for the three-month period, but measuring yourself twice a day makes NO sense.

Key Elements & Approaches

The approach in the weight loss example mirrors how everyone should measure employee attitudes. The organization should identify the business objectives of the survey process (and YES this should be around a tangible business outcome – not engagement scores or listening or other NON-business outcomes) and build a measurement process around achieving those business objectives.

So, our recommendation: a pulse survey strategy should be based on two key elements: (1) driving actual business outcomes and (2) helping struggling leaders.

How do you follow these approaches? Read our white paper “More Data or Better Data? A Pulse Survey Strategy That Makes Sense” or reach out directly to our director of research & analytics, Dr. Hannah Spell at to learn how you can make a difference in your organization.

Around a barrier business concept as a red dart solving an obstacle problem by averting a wall and hitting the target as a success metaphor for agility and dexterity in achieving your goal.

Become 2016’s HR All-Star: How to Utilize Employee Surveys to Transform Your Organization

If you’re ready to crank up your HR skills and make a name for yourself at your company in 2016, keep reading. Research has shown nearly 80 percent of mid-to large organizations conduct employee surveys on a somewhat regular basis (bi-annually or annually). The question is—how many of those organizations can actually speak to the value of the survey? Probably very few because there are certainly barriers to getting there. So for you, we are providing “barrier busters” below to help you remove obstacles and instead enable you to use your employee survey as a way to impact real business outcomes. Ultimately, you’ll set yourself apart as one of the few who isn’t simply checking the employee survey box.

Barrier: Getting Buy-In From the CEO

To get buy-in (and budget!) from the CEO, continue to take the focus off of “engage­ment” or satisfaction and put the focus on outcomes that actually matter — retention, customer satisfaction, productivity, etc. Employee engagement is not a business out­come, and it never has been. To be a business-focused HR partner, incorporate analytics that will show the value of conducting a survey for business outcomes that matter to your organization’s leadership.

Barrier: Demonstrating the Value of the Survey

Although conducting more sophisticated analysis is complicated, doing so makes the re­sults practical and action-oriented. Use an internal resource with a statistics background, reach out to a local university professor or student to assist with the analysis, or require your vendor to provide these analyses.

Barrier: Slow Turnaround Time

Getting the right data in the right place at the right level can be a process in and of itself. Reach out cross-functionally ahead of time so that you can turn around your analyses and recommendations quickly upon conclusion of the survey.

Barrier: Activating your Front Line, Not Just the Boardroom

Often the linkage analysis (if done at all) is relegated to the boardroom for review with senior leaders. While this is a great place to get started, execution takes place on the front-lines, so, get the word out about how attitudes drive business results. Again, this will take the focus off of the survey as a “let’s see if they are happy” and puts the focus on using employee at­titudes as a means to a (profitable) end.

Barrier: Getting the Entire Organization on the Same Page

As you know, not all of the leaders in your organization are focused on the same business outcome. So, incorporate local, relevant business outcomes into your senior level presentations so that you get buy-in across the organization. For example, although there may be a strong productivity metric in operations, the focus in corpo­rate IT might be on retention. Provide each function with the data and analysis around outcomes that are most relevant to them — this will drive home the importance of the survey and continue to increase your stature as a business partner.

You are now empowered to make a real difference at your organization! Need help on the analytics front? SMD’s patented talent management software, SMD Link, helps organizations harness the full potential of employee surveys by linking survey items to business outcomes. SMD’s tools allow organizations to quantify the impact of employee attitudes on business results. Furthermore, SMD’s Strategic Survey HeatMaps® focus leaders on the critical few drivers that will have the greatest impact on results. To learn more, contact us at