Chapter 1
The Workplace Revolution: Putting People First
In a world where we spend over 30% of our lives working, why do so many organizations still treat employee experience as an afterthought? Jacob Morgan's groundbreaking research reveals a startling truth: only 6% of companies have mastered creating workplaces where people genuinely want to be. The Employee Experience Advantage isn't just another business book-it's a manifesto for workplace transformation that has become required reading at companies like Microsoft, Adobe, and Airbnb. Backed by data from over 250 organizations, Morgan demonstrates that companies investing in employee experience outperform their peers by staggering margins: 4.4x average profit, 40% lower turnover, and stock returns that consistently beat market averages. As automation continues to reshape work, the question becomes more urgent: will your organization be a place where humans are forced to work like robots, or a place designed to leverage uniquely human capabilities?
Chapter 2
From Utility to Experience: The Evolution of Work
The relationship between employers and employees has undergone a dramatic evolution. Morgan traces this journey through four distinct eras, each representing a fundamental shift in how organizations view their people.
The utility era represented the most basic employer-employee relationship: organizations provided the minimum tools necessary for work, and employees received a paycheck. This transactional approach treated people as interchangeable parts in a machine. The concept of wellness programs, flexible schedules, or creating environments where people actually wanted to work would have seemed absurd.
Next came the productivity era, pioneered by Frederick Taylor and Henri Fayol, where managers used stopwatches to optimize worker efficiency. This approach essentially forced humans to function like robots before actual robots existed. As Morgan provocatively puts it, "Humans essentially took jobs meant for robots, and now that we have the technology to automate these repetitive tasks, those human 'placeholders' are in trouble."
The engagement era marked a revolutionary shift where organizations began considering what employees care about rather than just extracting value from them. While this represented progress, Morgan argues that most engagement efforts are merely cosmetic changes-like putting new paint on a junkyard car without fixing the engine.
Today, we're entering the employee experience era, which represents a fundamental redesign of the organization. Unlike the vague definition of "customer experience" as simply "the relationship between a customer and brand," Morgan offers a more substantive definition of employee experience as "the intersection of employee expectations, needs, and wants and the organizational design of those expectations, needs, and wants."
More practically, it means "designing an organization where people want to show up by focusing on the cultural, technological, and physical environments." This approach recognizes that experience must be co-created with employees, not just for them. The goal is to become what Morgan calls an "Experiential Organization" (ExpO)-one that truly knows its people and has mastered creating a workplace where people want, not need, to work.
Chapter 3
Why Employee Experience Matters Now More Than Ever
Several powerful forces are driving organizations toward focusing on employee experience. Despite decades of investment in engagement initiatives, global engagement scores remain dismally low. Gallup reports worldwide employee engagement at just 13%, while Aon places it at 65%-a discrepancy that highlights fundamental measurement problems.
Traditional engagement models categorize employees as actively disengaged (F grade), not engaged (D grade), or engaged (C grade), failing to recognize exceptional employees who go above and beyond. This framework essentially makes "average" the ceiling rather than the baseline. Organizations also typically measure engagement just once per year, despite questioning the effectiveness of annual performance reviews. As one CHRO admitted, she could manipulate scores simply by administering surveys on sunny days versus rainy ones.
Meanwhile, the war for talent has intensified dramatically. McKinsey predicts that by 2020, the global economy will face a shortage of 40 million college-educated workers, while developing economies may lack 45 million workers with secondary education. In advanced economies, up to 95 million workers could lack necessary skills for employment.
The competition for talent has also transformed. Traditional geographic and industry boundaries have dissolved-Coca-Cola now competes against Toyota for talent, and McDonald's against Airbus. Organizations also face competition from the gig economy, where talented individuals might choose to drive for Uber or join freelance marketplaces rather than pursue traditional employment.
Technology has further accelerated these changes. The proliferation of mobile devices with global connectivity has transformed how and where we work. Robots and automation threaten to replace many jobs, while the Internet of Things, artificial intelligence, and virtual reality create entirely new ways of working. What's fascinating is that technology has now surpassed what organizations can actually implement-we have the tools, but often lack the organizational structures to use them effectively.
Perhaps most significantly, transparency has fundamentally altered the employer-employee relationship. Previously, organizations with cash and brand power could treat employees however they wanted with little consequence. Today, employees research potential employers just as thoroughly as they research products before buying, using platforms like Glassdoor to see ratings, reviews, and salary information. Organizations that invest in employee experience benefit tremendously as they become known as amazing places to work.
Chapter 4
The Foundation: A Reason for Being
Organizations seeking to create amazing employee experiences must start with a Reason for Being-a purpose that transcends traditional business objectives. While conventional mission statements focus on market leadership and shareholder value, a true Reason for Being answers the question: "What impact does the organization have on the world and community around it?"
This purpose should avoid mentioning shareholder value, customer service, or profits. Instead, it should be something unattainable that forces ongoing big thinking and rallies employees by giving them something meaningful to stand behind. Companies like Airbnb ("Belong Anywhere"), Coca-Cola ("To refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference"), and Google ("To organize the world's information and make it universally accessible and useful") exemplify this approach.
Salesforce demonstrates this commitment through its 1-1-1 model, leveraging 1% of its technology, people, and resources to improve communities worldwide. This purpose has been part of its DNA since founding and helps explain why it ranked among the top-scoring companies in Morgan's research.
The Reason for Being serves as the umbrella covering the three employee experience environments: physical space, technology, and culture. Out of 252 organizations evaluated, only 15 (6%) qualified as true Experiential Organizations, with Facebook, Apple, Google, LinkedIn, Ultimate Software, Airbnb, and Microsoft leading the rankings.
Chapter 5
Creating COOL Physical Spaces That Inspire
The physical environment comprises 30% of the employee experience and includes everything from office design to amenities. Despite widespread discussion about workplace transformation, nearly 90% of workers worldwide remain dissatisfied with their work environments.
To create exceptional physical spaces, organizations must focus on four key characteristics, which Morgan cleverly abbreviates as COOL: Chooses to bring in friends or visitors, Offers flexibility, Organization's values are reflected, and Leverages multiple workspace options.
When employees eagerly show off their workplace to friends and family, it demonstrates they value their environment and feel connected to the company. Organizations like Facebook, Airbnb, and Google encourage employees to bring visitors, reflecting confidence in their employee experience. This openness serves as an effective talent recruitment strategy, as visitors often check job listings after experiencing impressive workspaces.
Workplace flexibility has become essential in our hyperconnected world. About half of U.S. jobs allow partial telework, and 80-90% of employees desire some remote work options. Flexibility extends beyond working from home to letting employees choose when and where they work. A global EY survey found employees ranked flexibility just below competitive salary in job importance. What was once considered a perk has now become a standard expectation for how work should be done.
The physical environment should visibly reflect an organization's values. When you walk into a workplace, the physical space immediately reveals its authentic values, just as someone's home reflects their personality. Facebook, which scored highest on the Employee Experience Index, visibly demonstrates its values of "Be Bold, Focus on Impact, Move Fast, Be Open, and Build Social Value" through its open floor plans, eclectic art, flexible workspaces, diverse employees, and culture of speaking up.
Rather than debating open versus closed offices, forward-thinking organizations offer varied spaces for different activities. Just as houses have different rooms for specific purposes, workplaces need multiple environments to support the 21 different workplace activities identified by Leesman across 110,000 employees. Organizations like SAP offer varied spaces-modern cubicles, open areas, cafes, collaboration zones, quiet rooms, and outdoor spaces-allowing employees to select the environment that best suits their current task.
Organizations with budget constraints can still create engaging workspaces through employee involvement. One organization recruited volunteers and set a budget at IKEA, with employees showing up on weekends to create environments they wanted. Similarly, Airbnb now recruits volunteer employees with a $900 budget to design conference rooms modeled after actual Airbnb listings, creating both cost savings and employee pride in the spaces they create.
Chapter 6
Implementing ACE Technology That Empowers
Technology has a profound impact on employee experience, serving as the "glue and nervous system" powering organizations and enabling the future of work. To create a great technological environment, organizations must focus on creating an "ACE" technological environment: Availability to everyone, Consumer grade technology, and Employee needs versus business requirements.
Organizations often create frustration by limiting access to new technologies to specific teams or departments. When employees know their peers have access to better tools while they're stuck with outdated systems, resentment builds. The traditional multi-year pilot program approach to technology deployment no longer works in today's rapidly changing environment-63% of respondents in an MIT/Capgemini study reported their organization's pace of technology change was too slow.
The San Diego Zoo demonstrates how even diverse workforces can be equipped with technology. This 100-year-old nonprofit with 3,000 employees ranging from cashiers to zoologists has transformed from classroom-based training to a robust online learning management system accessible to all staff. They've gone paperless with HR processes, eliminating over 100,000 sheets of paper in the first year alone. Beyond work tools, their Z-Tech program offers interest-free payroll deductions for personal technology purchases, helping hundreds of employees gain access to modern devices.
Organizations have placed excessive emphasis on "enterprise grade" technologies that often translate to clunky, outdated tools rather than truly robust, flexible solutions. The most effective enterprise tools now model themselves after consumer technologies like Twitter, LinkedIn, and Facebook. Consumer grade technology should be so well designed and valuable that employees would consider using something similar in their personal lives.
Most IT departments focus on technical checklists rather than understanding how employees actually work. This disconnect is like ordering a car with specific features but receiving a Frankenstein-like monstrosity that technically meets requirements but is unusable. When designing employee experiences, IT and HR departments must partner together-IT becoming more flexible while HR acknowledges potential technical challenges.
Organizations averaged just 13.5 out of 19.5 possible points for the technological environment-equivalent to a D+ grade. The lowest-scoring variable was focusing on employee needs versus technical requirements (4.4/6.5), reflecting organizations' continued struggle to understand how employees actually work rather than checking feature boxes. Technology either empowers people or renders them powerless-organizations that don't properly invest in this environment eventually hit a wall in their ability to adapt and innovate.
Chapter 7
Fostering a CELEBRATED Culture That Connects
Unlike physical and technological environments that you can see or touch, culture is the environment you feel-the excitement or dread about going to work. It's the organizational vibe that determines how employees are treated, what products are created, and how work gets done. Culture exists regardless of whether an organization consciously creates it, much like air surrounds us whether we acknowledge it or not. This makes it crucial to intentionally design culture rather than letting it form haphazardly.
A CELEBRATED culture encompasses ten key attributes that organizations must cultivate to create positive employee experiences:
Company Is Viewed Positively: When an organization is viewed negatively by the public or other employees, it affects how workers feel about their employer-similar to dating someone your friends and family dislike. According to LinkedIn research, a bad employer reputation costs companies significantly-up to $7.6 million in additional wages for a 10,000-employee company, with nearly half of professionals refusing to work for companies with negative brand factors regardless of pay increases.
Everyone Feels Valued: Feeling valued is fundamental to employee experience-few people want to work where they don't feel valued. Organizations must understand what matters to their people by getting to know them personally. Several components contribute to employees feeling valued, including fair compensation, having their voices heard, and receiving recognition for their work. The most effective organizations ask for feedback, acknowledge it, and then take transparent action within reasonable timeframes.
Legitimate Sense of Purpose: Having a sense of purpose requires both individual self-awareness and organizational support. Employees need to understand their own values and aspirations, while organizations must connect employees' work to the company's reason for existence and show the direct impact of their contributions. Research by Adam Grant showed university fundraisers increased productivity by 400% after meeting scholarship recipients-proving that connecting work to impact creates genuine purpose.
Employees Feel Like They're Part of a Team: Modern teams should be dynamic and cross-functional rather than confined to traditional departmental structures. Creating a team environment requires rewarding teams as a whole rather than just star performers, allowing employees to participate in multiple teams, and creating teams based on needs rather than organizational charts.
Believes in Diversity and Inclusion: True diversity encompasses not just gender, race and religion, but also differences in beliefs, experiences, technical expertise, and backgrounds. Organizations like EY have found that diversity initiatives deliver measurable business impact through lower turnover, higher retention, increased revenue growth, better team collaboration, and enhanced brand favorability.
Referrals Come From Employees: Employee referrals are a powerful indicator of workplace experience quality. Google discovered that financial incentives alone don't drive meaningful referrals when doubling their referral bonus from $2,000 to $4,000 failed to increase referrals. As former SVP Laszlo Bock noted, employees referred others because "they actually loved their work experience and wanted other people to share it."
Ability to Learn New Things and Given the Resources to Do So and Advance: When employees feel they have nothing left to learn and nowhere to grow, they become disengaged and eventually leave. A Randstad survey of 11,000 U.S. workers found lack of career path to be the number one reason people quit their jobs. Organizations must provide tangible support through mentoring programs, education funding, training sessions, employee groups, and other development resources.
Treats Employees Fairly: Fairness in the workplace means being free from bias, dishonesty, or injustice-a fundamental requirement for a positive employee experience. However, treating employees fairly doesn't mean treating everyone identically. Fairness requires knowing employees as people beyond their job functions, understanding personal circumstances, listening to everyone, providing honest opportunities without favoritism, showing empathy, and treating employees like adults.
Executives and Managers Are Coaches and Mentors: According to Gallup, managers account for a 70% variance in employee engagement. The most effective leaders now position themselves at the bottom of an inverted pyramid, pushing everyone else up rather than having employees climb to them. Google's extensive research identified being a good coach as the number one behavior of great managers.
Dedicated to Employee Health and Wellness: Modern workers face unprecedented challenges: longer hours, constant connectivity, shorter attention spans, and overwhelming demands that lead to unhealthy habits. Forward-thinking companies now implement comprehensive wellness strategies including health education, nutritional support, fitness programs, nap rooms, wearable devices, walking meetings, stress workshops, financial planning assistance, and meditation classes.
Chapter 8
The Business Value of Employee Experience
Investing in employee experience delivers substantial business value across multiple dimensions. Morgan's research compared nine organizational categories, with particular focus on how Experiential Organizations (the top 6%) compare against all others combined (nonExperiential).
The data reveals Experiential Organizations dramatically outperform others across key metrics:
1. Customer Service: Experiential Organizations appear on customer service excellence lists twice as often as all other categories combined. Even compared to preExperiential organizations (the second-best category), they appear 1.3x more frequently-a difference that can translate to millions in revenue.
2. Innovation: Experiential Organizations appear on innovation lists 4.5x more often than nonExperiential organizations, and almost 7x more often than inExperienced organizations. This makes sense as employees in these organizations receive the resources needed to bring their best ideas to work daily.
3. Employer Attractiveness: Experiential Organizations dominate here, appearing on "best workplace" lists 6x more often than nonExperiential organizations, 7.4x more than inExperienced organizations, and 2.6x more than preExperiential organizations.
4. Financial Performance: Experiential Organizations operate with 20% fewer employees while maintaining 40% lower turnover and 1.5x higher employee growth. Their business performance is even more impressive-generating 2.1x average revenue, 4.4x average profit, 2.9x more revenue per employee, and 4.3x more profit per employee compared to nonExperiential Organizations.
5. Stock Performance: Analyzing stock performance from January 2012 through October 2016 reveals that Experiential Organizations consistently outperformed all other groups, including benchmark indices like the S&P 500 and NASDAQ.
Perhaps not coincidentally, these high-performing organizations also pay their employees 1.6x more than nonExperiential companies. The evidence should convince even the most skeptical executives that prioritizing employee experience delivers substantial business value.
Chapter 9
Building the Experiential Organization
Creating an organization centered on employee experience isn't optional-it's the only path forward for the future of work. The journey begins with genuine care for employees-not something that can be taught but a fundamental distinction between truly Experiential Organizations and everyone else. These companies don't invest in employee experiences primarily for business value; they invest because they genuinely care, and the business benefits follow naturally.
Organizations must define a compelling Reason for Being that focuses on impact to the world and people, isn't centered on financial gain, is unattainable, and rallies employees. Everything an organization does should trace back to this purpose, including values, workspace design, work methods, tools, and management approaches.
Building a robust people analytics function helps organizations make better data-driven decisions about their workforce. While approaches vary by organization, successful teams typically start small, identify required skills (data science, HR expertise, business understanding), secure executive support, train the organization on analytics capabilities, and communicate findings through compelling narratives rather than raw data.
Traditional HR is evolving into a more innovative, human-centric function focused on employee experience. Many organizations are replacing "HR" with titles like "people," "talent," and "experience" departments. This isn't merely cosmetic-it represents a fundamental shift where HR professionals become agents of change and creative thought leaders who design organizations where people genuinely want to work.
Every Experiential Organization implements thorough feedback mechanisms connecting employee voices to organizational decisions-the essential bridge for employee experience. Feedback happens through both in-person interactions and technology, with many organizations shifting from annual performance reviews to regular, real-time conversations.
Rather than focusing on linear employee life cycles, organizations should concentrate on "moments that matter" or "moments of impact"-significant experiences that transcend work-life boundaries. These moments include first days, promotions, personal milestones like having children or buying homes, and departures. This approach treats employees as whole individuals with unique experiences rather than just job performers, enabling personalization in the workplace.
Modern organizations should operate like laboratories rather than factories. While factories treat employees as replaceable parts working in rigid, repetitive environments with strict schedules and dress codes, laboratories embrace experimentation, failure, and employee feedback. Experiential Organizations don't claim to have all answers but use data to test new ideas.
Chapter 10
The Path Forward: Creating Your Own Experience Advantage
Creating exceptional employee experiences is possible for any organization regardless of size, industry, or location. While newer companies may implement changes faster without legacy baggage, established giants like Microsoft (founded 1975) and Apple (founded 1976)-both with around 115,000 employees-have successfully transformed their employee experiences.
Even the best organizations acknowledge their flaws and continuously strive to improve. Experiential Organizations know their weaknesses and actively work to address them, never settling for "good enough" but always reaching higher.
Simply implementing programs around the 17 employee experience variables won't guarantee success. These variables represent what employees value most, but organizations must develop their own approaches rather than following a rigid checklist. Employee experience isn't just about what you do but how you do it.
Truly Experiential Organizations don't just talk about valuing employees-they demonstrate it through significant investments and organizational redesign. They know their people deeply, not just through analytics but through genuine manager-employee relationships that recognize employees as whole individuals with passions, fears, interests, and aspirations.
Rather than creating experiences for employees, Experiential Organizations create with them. They maintain transparency, actively seek feedback through technology and in-person discussions, and involve employees in the experience design process whenever possible.
Organizations should draw inspiration from others but focus on developing their unique identity rather than copying competitors. People choose to work for your company because of what makes it distinctive, not because it imitates Google or Facebook.
As automation, alternative work arrangements, and organizational redesign reshape work, companies face a crucial choice: put employees at the center or continue business as usual. The data is clear-the business impact of employee experience is significant, but only for organizations that fully commit to transformation. Life is short-we all deserve to work for organizations that truly know their people and have mastered creating places where people want, not need, to show up. What we need now are executives with commitment to change, managers willing to lead it, and employees with courage to speak up and demand it.
