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An employee engagement program is a critical component of the Human Resource’s yearly strategic plan. Gallup’s report on employee engagement revealed that organizations with high levels of engagement have a 21% higher profitability. Moreover, large organizations such as Cisco have their entire employee engagement planned out for every day of the year. 

Additionally, a Gallup article revealed that engaged employees have shown an 81% difference in absenteeism, and a recorded 14% increase in productivity, necessitating the need to implement a solid employee engagement program. Therefore, this article structures the step-by-step process of designing an annual Employee Engagement Plan using the Strategic Management framework and the ideas of an employee engagement action plan.

Designing an employee engagement strategy plan

Here is a step-by-step guide to designing an employee engagement strategy and running it end to end.

Step 1: Scan the internal environment of the organization.

Scanning the internal environment constitutes studying the various ways the organization’s employees, management, stakeholders, business strategy, culture, resources, and capabilities engage with each other.

For instance, what are the different employee touchpoints that the leadership has with the employees? What are the different productivity tools used in the organization? How does the organization implement a business strategy? What are the various employment benefits offered? How often are outreach programs conducted by the leadership team?

HR needs to not only frame these questions that are unique to their organization but also self-evaluate the organization on how well they fare in each of these interactions.

The tools that can be used to conduct this study are:

  • Group discussions
  • Employee/ Stakeholder Interviews
  • Employee surveys
  • Resource data
  • Performance reviews
  • Feedback
The expected outcome of this step: Strengths and Weaknesses of the organization’s current employee engagement program

Step 2: Scan the external environment of the organization

The external environment of an organization consists of the competitive, economic, political, socio-cultural, and technological landscape of the market the organization is working in. These are important to be taken into consideration in framing an annual employee engagement program. These affect the effectiveness of all strategic initiatives.

Abhijit Bhaduri, author of the best seller ‘The Digital Tsunami’ mentions how technology trends like Augmented Reality and Holography can be effectively used in job simulation and employee experience. Thus having a careful watch on changing competitive benchmarks, industry trends, digital tools for employee engagement, etc and prove useful to reinvent a program to create an engaged workforce.

The following tools can be used to conduct this scan:

The expected outcome of this step: Opportunities and Threats of the (HR) organization

Step 3: Setting organization’s employee engagement objectives

The process of goal setting typically constitutes defining objectives that the organization wants to achieve in their people front – their culture, human capital, their people policies, etc. Strengths, Weaknesses, Opportunities, and Threats can be a context to determine the objectives.

For example, an assumption such as - ‘Our competitors uses employee referrals as a strong source to recruit their talent. Referral employees tend to be the best and the most retained talent in the industry,’ is a threat that could lead an organization to consider ‘Improving employee referrals’ to be their HR goal.

The S.M.A.R.T. methodology is predominantly used and is famously known for its ability to guide and help achieve goals. It draws the following guidelines.

Smart Objectives

‍For example, a goal like ‘Improving the employee referrals of the company’ needs to be:

  • Specific, for example, ‘We aim to improve our employee referrals.’
  • Measurable, for example, ‘We aim to improve our employee referral %age from X to Y.’
  • Achievable, for example, ‘We already are at X, thus achieving Y should be practical.’
  • Relevant, for example, ‘Employee referrals are a double-edged sword that helps recruit new employees and that also indirectly indicates the employee Net Promoter Scores.’
  • Timely, for example, ‘This increase in employee referrals needs to be within this financial year.’
The expected outcome of this step: A timeline and a priority list of SMART goals.‍

Step 4: Gap analysis

After setting the objectives, the next step is identifying the status quo of the variables and recognizing the distance that needs to be covered to achieve the planned goals.

This can be done using various tools, but a Fishbone (Ishikawa)analysis is a pretty simple and effective tool to drill down on the exact issues that need to be tackled to achieve these goals. The following is a snapshot of how Fishbone analysis (Lean Six Sigma) is done.

  • Organize a cross-functional focus group.
  • Allow them to identify the root causes (gaps) that affect achieving a prescribed goal.
  • The root causes (gaps) can be categorized under ‘People’, ‘Processes’, ‘Policies’, etc., and further drilled down.
  • Root cause analysis recommends understanding up to 5 levels of ‘Why’s of every cause to derive the exact root cause.
  • List out the final list of root causes (Gaps).
A fishbone diagram example
A fishbone diagram example

For example, a fishbone analysis of ‘Employee referral’ might bring out root causes such as ‘Pay inequities’, ‘Lack of employee insurance’, ‘insufficient employee feedback mechanisms, etc.

The expected outcome of this step: Qualitative /Quantitative Gaps in the existing process

Step 5: Choice of strategy

Once the exact gaps in the process are listed, these need to be prioritized to execute. There generally are a number of paths to achieve goals, thus, selecting the right strategy (or a gap to tackle) is a critical component of execution.

The fishbone analysis further allows screening and prioritizing these gaps using the following method:

Against each of the final list of root causes, evaluate the following:

  • How does solving this gap impact the achievement of the goals? (Impact)) (Rate this on a scale of 1: signifying low impact to 10: signifying high impact)
  • How financially feasible/ easy is it to work on solving this gap? (Ease) (Rate this on a scale of 1: very difficult to 10: very easy)
  • Calculate the [Impact + Ease] value and tabulate it against the respective root cause
  • Order the list of root causes (gaps) in decreasing order of the sum (A Pareto chart)

For example, a gap such as ‘Pay inequalities’ has low ease (because of the high cost involved) and a high impact, whereas ‘Insufficient employee feedback mechanisms’ have high ease (because the cost of implementation is low) but has a moderate impact. Depending on financial feasibilities and business priorities, leaders should further choose to tackle apt strategies.

The expected outcome of this step: An employee engagement program - the list of all the strategies that aim to address the top priority gaps.

Step 6: Creating the team

The team that leads the implementation of the employee engagement process/program is important for its success. Depending upon the expertise a particular strategy requires - the team needs to have members who can contribute to it.

For example, a ‘Creating a robust employee feedback mechanism’ strategy requires questionnaire design experts, technology experts (if automation is required), and HR experts (to lead and implement the strategy - in a way that increases engagement.).

The expected outcome of this step: List of team members and their roles in each of the high-priority employee engagement action plan ideas.

Step 7: Measurement of performance

The 'measurability' aspect of the SMART goals provides metrics to be watched to evaluate the impact of the strategies to achieve goals.

For example, for the goal ‘Increasing employee referrals from X to Y’ - the actual percentage of employee referrals out of the total recruitment is the metric to be watched.

The expected outcome of this step: Value of the Metric used for measuring employee engagement.

Step 8: Analysing Variance

The variance between actual and standard performance needs to be calculated to find a further gap in implementation. For example, if the strategies did not allow achieving expected Y% employee referrals within the stipulated time, these need to be re-evaluated and reconsidered.

The expected outcome of this step: Variance of the Metric measured = Planned metric value – Actual achieved metric value

Step 9: Taking corrective action

Re-evaluation of strategies should follow the entire flow of setting goals and selecting strategies (From Step 1 through 9). The reason why a strategy is ineffective or a goal is not being achieved could be because of a wrong assumption throughout the course of planning a strategy.

For example, the reason why the goal ‘Improving the employee referrals of the company’ is not being achieved could be because of the following few of the many other plausible reasons.

  1. The target to be achieved was assumed wrong - 'Y' was too high a target.
  2. The timeline is too short.
  3. The fishbone analysis missed out on a major determinant, for example, ‘Referral rewards for the referring employees'.
  4. A miscalculation in the impact analysis. For example, the impact of ‘Pay inequities’ was lower than assumed.
  5. The team did not have an important skill required for implementation. For example, say questionnaire design in employee feedback implementation.
The expected outcome of this step: Identifying the wrong assumptions, correcting them, and reinitiating the strategy

Digital tools for employee engagement‍

Digital tools for employee engagement can help you create and grow a high-performance, high-engagement work culture. However, they work best only when the strategy is created so that it emphasizes recognition and feedback and helps employees feel connected to their organization’s mission and values.

Using digital tools for employee engagement - like Empuls can help you design the best engagement plan to suit your organizational DNA. Schedule a demo today and talk to our executives to find out more about Empuls. You can also start a 30-day free trial now.

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Rani Joseph

Rani Joseph LinkedIn

Rani Joseph comes with a decade-long experience across the value chain of content and brand marketing. She currently is the Sr. Manager of Content Marketing at Xoxoday.