Memo from HR: We Do Too Create Value

A professor's criticism of the profession stirs up a frenzied debate.

One veteran HR professional told CFO.com that he could agree with that only to a limited point. John Eve, a former vice president of human resources at National Register who has been consulting for the past year but will start a new job next week, said he has seen many high performers destroyed by their companies’ management and culture.

“You can’t put a great sales performer, say, into a culture that dismisses him as unimportant, give him a bad manager, and think that he will be driving results,” Eve said. “No, no, no. The professor’s statement was an overstatement.”

Eve and others disputed the professor’s suggestion that there is no evidence of a correlation between engagement and productivity. Plentiful research exists that makes the opposite point, they said.

According to Anna Erickson, an industrial psychologist and consulting director at Questar, a business research and consulting firm, one of the most-often-cited such studies is “Business-Unit-Level Relationship Between Employee Satisfaction, Employee Engagement, and Business Outcomes: A Meta-Analysis,” which appeared in the Journal of Applied Psychologyin 2002. She also referenced what she called a seminal study done at Sears a few years ago that found that engaged customer-service employees drive increased profits.

In research circles, studies that are only a few years old often are considered quite recent. In contrast, according to Erickson, Professor Beatty’s views are indeed outdated. Although they constituted state-of-the-art thinking when she was in graduate school in the 1980s, they have since then have been rendered obsolete by newer research, she said. “When you stop and think about it, it doesn’t make sense that my attitudes would not impact how I perform. Intuitively, it’s not very logical.”

What HR departments measure has changed over those years from job satisfaction to employee engagement, which are different things, Erickson said. Surveys no longer ask whether employees are happy and how much they like their jobs. Instead, they ask such questions as: Are you getting clear direction? Are you able to provide input into your role? Do you have the tools and equipment that you need? “The focus is more on things that are important to getting the job done,” she said.

For his part, Beatty argues that the old and new approaches really are getting at the same thing. “We started years ago looking at job satisfaction, commitment, and involvement,” he said. “But ‘engagement’ may be this generation’s satisfaction and commitment. Some have called it old wine in new bottles.”

The problem, he continued, is that definitions of “engagement” vary widely from study to study and company to company, so “who knows what you’re measuring? We don’t have a uniform definition, let alone a uniform understanding of what its drivers are, let alone knowledge of what impact engagement may have on value creation.”

The Value of Numbers 

His broader assertion that HR is weak on providing data analysis that drives economic value frustrated many of those who commented on the article; they claimed, in one way or another, that human resources does provide useful data analysis.

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