June 30, 2022
TPL Insights: Building Peak-Performance Cultures #125 – Why Microsoft Measures Employee Thriving, Not Engagement
By Rob Andrews with paraphrased content from Dawn Klinghoffer and Elizabeth McCune’s article in Harvard Business Review June 24, 2022
One thing is clear: None of us are the same today as we were prior to 2020. As our employees change, we must also change our approach to empower them. At Microsoft, where Dawn Klinghoffer and Elizabeth McCune work on the People Analytics team, that means learning what data can tell them about how employees aspire to live their lives meaningfully. They landed on a new way of measuring thriving, inside and outside of work, that goes beyond engagement. In this article, Klinghoffer and McCune share how and why they came to this measurement — and how your company can learn from their experiences.
Why Thriving Is the New North Star
Prior to 2022, Microsoft conducted one lengthy, annual survey that tracked employee engagement. It often took months to digest and plan actions around. Yet, they consistently encountered challenges in building a shared definition of engagement across the company. And often, despite the positive employee engagement scores, it became clear that employees were struggling when they dove deeper into the responses. To Microsoft this was a reflection that they hadn’t yet set a high enough bar for the employee experience, and it motivated them to do better in measuring what matters, one of nine principles in Total Performance LeadershipTM.
So, McCune and Klinghoffer started asking employees for feedback through a shorter yet more focused survey every six months. This new approach is helping them stay closer to employees’ feedback, allowing them to take more immediate action.
They also sought to define a new, higher bar that went beyond engagement, drawing inspiration from many sources. One was what Microsoft’s Chief People Officer, Kathleen Hogan, calls “The 5 P’s.” Like Maslow’s Hierarchy, it breaks down employee fulfillment into five key, successive components: purpose, pride, people, perks, and lastly, pay. In a time that has prompted many to reflect on the impact that their careers have on their lives, it felt critical to recalibrate the listening systems to measure their progress towards that end goal — a sense of purpose. They were also inspired by Ross School of Business’s Gretchen Spreitzer and colleagues’ research on thriving as the antidote to languishing. As they moved beyond employee engagement, they decided to focus on their own version of employee thriving.
At Microsoft, they define thriving as “to be energized and empowered to do meaningful work.” This is the new core aspiration they have for their employees, one that challenges them to push themselves every day so every employee can feel like they’re pursuing that sense of purpose. Microsoft’s focus on thriving isn’t just about recovering from the impact of the pandemic or matching pre-Covid employee sentiment scores. It’s about coming out the other side and doing even better.
What It Looks Like to Thrive
They implemented their thriving benchmark in the very first employee survey in 2022. Not only did they look at how many people reported they were thriving, but calculated company-wide averages based on responses from a five-point scale. If an employee selected “strongly disagree,” then that translated to an individual score of zero, and “strongly agree” would be the equivalent of a 100. This ensured their insights considered all positive, negative, and neutral sentiment.
After analyzing the results, they found that thriving averaged 77 company-wide — a number they see as strong, but one they can still work on. When they broke down thriving into its three components, they saw that meaningful work (79) and empowerment (79) both scored higher among employees than energized (73).
To understand employee experience behind the numbers, they dove into the open-ended survey responses. Three key themes stood out.
What Klinghoffer and McCune saw was that employees who were thriving and not thriving were both talking about culture, but in vastly different ways.
Thriving employees talked about a collaborative environment and teamwork with colleagues, an inclusive culture with autonomy and flexibility, and well-being support. These comments reference examples such as being able to have honest, non-judgmental conversations on difficult topics with a focus on finding solutions.
Employees who weren’t thriving talked about experiencing silos, bureaucracy, a lack of collaboration, and accountability. In these comments, they heard a lack of agency and a sense of being a cog in a machine. In other words, employees were the opposite of being empowered and energized to do meaningful work. Every employee needs clear objectives, key results expectations, and a clear understanding of how they are helping the broader organization fulfill its purpose.
Thriving Takes a Village
Diving deeper into the numbers, it’s clear that everyone has a role to play. At Microsoft, they’ve long studied importance of managers and they know their role has been more crucial than ever as they helped their teams navigate through uncertainty. Said McCune, “It’s heartening to see our managers shine during such a difficult time. “My manager treats me with dignity and respect” scored a 93, meaning almost every employee selected “strongly agree” — but this also means they still need to ensure that’s the experience for every single employee. They also saw high scores in confidence in manager’s effectiveness (87) and managers’ support for careers (85), showing strong sentiment that managers are helping their teams succeed at the company.
While they see these scores as strengths, they’re strengths they want to keep building to ensure a positive lived experience for all employees.
Thriving and Work-Life Balance Are Not the Same
As they think about how to support thriving, they say it’s important to distinguish it from work-life balance. While thriving is focused on being energized and empowered to do meaningful work in your role, work-life balance reflects employees’ personal lives too. Employees rated their satisfaction with work-life balance as a 71, and while it’s encouraging to see work-life balance improving, it hasn’t fully recovered yet to pre-Covid levels. And there are times when thriving and work-life balance can move in different directions.
For example, an employee who feels underutilized in their role may have great work-life balance from a perspective of hours and workload, but not feel energized while they’re at work or inspired by the meaning and impact of what they’re working on. On the other hand, there are times when people can thrive and feel so fulfilled by the hard work it takes to make progress on a big project that they can make a short-term tradeoff on work-life balance and be perfectly okay with it.
Klinghoffer and McCune know that work-life balance may ebb and flow but wanted to learn from employees who both rated their work-life balance highly and said they were thriving in that work-focused portion of their life. They compared the 56% of employees who said they were thriving and reported higher work-life balance to the 16% who were thriving but had lower work-life balance scores. Interestingly, employees who felt they were working toward a purpose felt empowered and had autonomy to make decisions felt they had better work life balance even if they were working more hours.
Challenges for Thriving on the Road Ahead
As more and more companies look closely at how they listen to and support their employees, it’s important to spend time understanding what your north star is and to make sure it’s connected to the outcomes you are trying to drive as an organization. This new era won’t work for employees if you’re not listening or if what you’re listening for doesn’t evolve along with them and how they do their jobs. There isn’t a one-size-fits-all solution, but paying close attention to how your employees thrive is one path forward.
McCune and Klinghoffer know this is just the beginning of their journey to understand how employees thrive in their own organization. Looking holistically at the written responses from those who weren’t thriving offered more clues about where they can enhance the employee experience. For example, while employees scored “I feel included in my team” highly at 86, by far the most common thread among those who were not thriving was a feeling of exclusion from a lack of collaboration to feeling left out of decisions to struggling with politics and bureaucracy. They intend to continue to focus on ensuring inclusion is felt as part of their culture across all teams and organizations.
Ultimately, every score, whether high or low, gives them a baseline to keep listening, learning, improving, and adapting to new changes that still undoubtedly lie ahead. As we move forward, they are excited to keep studying the numbers even more deeply to understand how thriving can be unlocked across different work locations, professions, and ways of working.
This article by Dawn Klinghoffer and Elizabeth McCune is a powerful example of how one huge company is working hard to improve the employee experience. In another recent HBR article, one author said the Great Resignation was tantamount to a Great Exploration, meaning that today’s employees are in search of something more than perks and pay. According to Microsoft’s Chief People Officer, Perks and Pay are #4 and #5 respectively on the 5Ps of Employee Fulfillment. Numbers 1, 2 and 3 are Purpose, Pride and People. At Allen Austin, even though we do search, interim and leadership advisory, everything we do is about building peak performance cultures. It supports our purpose of enhancing the lives and effectiveness of our associates, clients, and stakeholders. At a time when our world seems to be in chaos, I hope you’ll find this material invaluable.
Consultants in Retained Search & Leadership Advisory