Everybody endorses it – almost nobody knows how to measure it. Two new tools that attach hard numbers to soft and squishy feelings.
It’s the worker on the factory floor with the power to stop an entire production line if something goes wrong. It’s the sales clerk in the retail store who’s happy to exchange an item for a customer – with or without the sales slip. It’s the programmer in the software shop who’s chartered to do whatever it takes to get the code written right and on time.
Trust and empowerment – the twin principles of working in a fast company, but two of the squishiest, softest terms in business. Both are hard to define and even harder to measure.
Enter two new metrics that begin to attach hard numbers to these soft abstractions: the Levering Trust Index, created by California-based author and consultant Robert Levering, which measures the trust employees have in their employers; and the Empowerment Index, created by the Swedish Institute of Public Opinion Research (SIFO), which measures empowerment, or the trust employers have in their employees.
Robert Levering, who operates the Great Place to Work Institute, got the idea for his index between the two editions of his best-selling book, The 100 Best Companies to Work for in America.
“If you don’t have trust,” Levering says, “people won’t cooperate, won’t be committed, and won’t know where they stand.”
To create his index, Levering generated a survey consisting of fifty questions divided into five dimensions: Credibility, Respect, Fairness, Pride, and Camaraderie. The survey asks respondents to rate both the company as a whole and their smaller work groups on a five-point scale, according to such statements as “Management has my best interest in mind when making decisions,” or “Management trusts people to do a good job without looking over their shoulder.”
Berth Jönsson at SIFO developed the Empowerment Index for ABB Asea Brown Boveri in the United States. According to Jönsson, motivation and trust are not adequate measures; employees also need appropriate skills and tools to do the job. Thus SIFO’s survey adds questions regarding employees’ willingness and ability to take action, the support they receive to take action, and their access to systems and information. Categories include Motivation, Support Within the Organization, Awareness of Quality Demands, Responsibility Versus Authority, and Competence. Like Levering’s survey, the SIFO questionnaire is administered to employees anonymously, then sent back to SIFO for tabulation; it’s been used both in the United States and in Europe by companies such as AT&T, Skandia, Swedbank, and Microsoft.
Surprisingly, even the best companies fare relatively poorly on both surveys. The average score for Levering’s 100 best companies is 72%. According to Jönsson, companies seldom score above 400 out of 1,000 points on the SIFO survey, and most companies come in at around 200 or 300 points. Leif Edvinsson, director of intellectual capital at Skandia, which scored 313 on the SIFO survey in 1994, says the 400-point performance ceiling shows how little companies are doing to leverage their human capital.
Robert Levering can be reached at the Great Place To Work Institute in San Francisco, 415-776-5566; Berth Jönsson is at the Swedish Institute of Public Opinion Research in Stockholm, 46-8-698-9962.