Employee Engagement Yields Strategic Benefits

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Increasing employee engagement provides strategic benefits to employers and is important to organizations that value creativity, productivity and growth. Organizations with engaged employees typically have better financial and production performance than organizations with disengaged employees. This is because engaged employees generally have a sense of purpose and exert persistent effort in reaching performance goals, as measured by the metrics used to keep engagement efforts oriented to organizational objectives.

When Gallup, a corporation providing analytics and advice to help leaders and organizations solve their most pressing problems, compared key business outputs of employers in the top quartile of employee engagement with employers in the bottom quartile, it found that employers with more employee engagement had:

  • 21% higher productivity;
  • 22% greater profitability;
  • 35% lower absenteeism;
  • 65% less employee turnover;
  • 46% fewer safety incidents; and
  • 41% fewer quality defects

Long-term, consistent employee engagement depends on building a culture that provides the environment and benefits typically valued by most employees. Among those are clear communication and understanding of expectations, a connection between work performance and the company mission, and feedback and recognition for the value of employees’ work towards meeting performance goals.

As a result, improving employee engagement should be viewed as an ongoing process, with a number of diverse campaigns and initiatives. Each campaign and initiative produces data and information to be incorporated in the next effort. This creates a cycle of engagement and performance. As employee engagement improves performance, higher performance encourages more employee engagement.

An employer must first understand what employee engagement is before undertaking a campaign to improve it. The US Office of Personnel Management defines employee engagement as “the employee’s sense of purpose that is evident in their display of dedication, persistence, and effort in their work or overall attachment to their organization and its mission.”

An engaged employee’s key descriptors include:

-Has a sense of purpose;

-Has an attachment and dedication to the employer and its mission and goals; and

-Exerts persistent effort towards achieving those goals.

A SHRM Foundation report describes engaged behavior as “persistent, proactive and adaptive in ways that expand the job roles as necessary.”

When determining an employee’s level of engagement, the following terms are used:

Actively engaged. An actively engaged employee promotes the employer’s interests and wants to achieve its goals and mission. He or she often will be described as a “self-starter” who “goes the extra mile.”

Disengaged. A disengaged employee is one who does his or her job with no additional effort to develop or to improve. Interest in the employer’s mission, values and goals is minimal to nonexistent. This employee is just putting in time to get a paycheck.

Actively disengaged. An actively disengaged employee has already mentally and emotionally left the company, and may even be in an active job search. Another way of thinking of an actively disengaged employee is that he or she is “estranged” from the employer.

To place these terms in context, a Gallup poll on employee engagement in the US consistently shows that, on average, only 31 percent of employees are actively engaged, while 52 percent are disengaged and 17 percent are actively disengaged.

Employers should recognize that engagement and job satisfaction, though sometimes used interchangeably, are different. Whereas job satisfaction is tied to factors that are in the employer’s direct control (e.g., pay, vacation and paid leave, insurance), engagement is more often influenced and controlled by the employee’s manager or supervisor through job assignments, daily interaction, feedback and recognition.

Performance is defined by the Business Dictionary as “the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed.” In context of employee engagement, performance means achieving results that contribute directly to the goals and mission of the organization.

The Cycle of Engagement

Improving employee engagement is not a singular effort. Using a single campaign to increase engagement produces minimal results and the effects tend to be short-lived. Long-term employee engagement depends on an employer culture that provides the environment and benefits typically valued by most employees:

– Good pay;

– Decent benefits;

– A sense of purpose and clear expectations;

– Helpful and practicable feedback; and

– Resources available to employees to develop and perform their jobs well.

An employer will achieve greater success at increasing long-term employee engagement by viewing the process as a cycle that continuously repeats. After (1) preparing and planning a campaign, the employer (2) initiates and (3) works through to completion of the initiative. Afterwards, the employer (4) evaluates the results of the campaign and follows through on needed or desired changes or modifications, based on employee feedback and analysis of predetermined metrics. Then the cycle is repeated.

Eventually, there will be multiple campaigns occurring at the same time, focused on different business processes, with each at a different point in the cycle. It often is helpful to create and use checklists for tracking and monitoring each campaign.

Like many long-term goals, an employer’s goal to improve engagement is more achievable when broken down into smaller intermediate and short-term goals. Each engagement campaign should be planned with a specific function and output in mind, and preparations should be made accordingly.

The metrics used in each campaign help keep employee engagement efforts focused on performance. Other business analytics and measures can help show the overall impact of creating a culture of employee engagement and performance. One way is to measure the change in the employee lifetime net revenue (ELNR) value, or the long-term value an employee adds to an organization. Employers also can review the return on investment (ROI) of their engagement campaigns.

Whatever method an organization chooses to use, an employer should analyze both short-term and long-term data to keep employee engagement effective and on-track to meet performance goals. As it does, the union of engagement and performance gains strength and infuses its benefits to the organization.

3 COMMENTS

  1. Robert, you really should read, “The Halo Effect” by Phil Rosenzweig, it gives very compelling reasons why we should consider alternative explanations to research conclusions. He has some logical challenges to some of the most successful business books ever written. I applied his logic to the Gallup numbers, and they are grossly misleading. The Halo Effect would suggest that companies with higher EE numbers have good leadership, good management, better products, customer support and sales and are therefore more successful. Their EE numbers are a result of being successful and not the reason for the success, a far more likely explanation. I doubt Gallup went to the trouble of comparing all the traits that lead to success for each company they chose to put in their EE categories. The corollary versus causation is the problem with the Gallup numbers. I have a long career of requesting CEO approval for large expense and capital approvals and would never use a corollary justification. That would be a career-ending event.

  2. Thanks Robert. That really said. Salary only not enough today. An employee also looking if he/she can give more value by showing his/her skills to company. If company not appreciate, he said goodbye. Stress free environment also helps a lot. That my imho.

  3. Thank you for the recommendation, Jim. It sounds like a very good book; I look forward to reading it.

    There has been further research into the the question of which comes first, engagement or productivity. Although early analysis points to engagement more likely being the initial factor, there is a lot of evidence that higher productivity definitely helps generate a more engaged workplace culture – a feedback loop, as it were. The best point to remember is that management and HR don’t have to limit themselves to focusing on just Engagement or Productivity. They can do both and reap all the benefits.

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