Employee engagement can boost performance

Posted on Written by Jerald F. Robinson
Jerald F. Robinson

“Engagements” are often listed in the Sunday newspaper with pictures of a couple soon to be married. No, marriage is not the topic this month. Some business leaders keep an engagement calendar (also referred to as an appointment book, by some.) No, this is not the topic of the month, either. When you go to an automobile dealership “to look” at the new cars, the salesperson is an expert at the engagement process. So what is this “engagement” process and why is it important to management in 2010?

Increasingly in both retail sales and service, as well as in all management circles, a relationship must be developed with customers and with employees and managers. Although some customers say they want to be able to shop unhindered, most major retailers have geared up with some program to empower employees at various levels to become engaged with customers. Engagement has been shown to increase sales and especially can be used better to cement customer loyalty. Grocery chains can track their loyalty strength as they often use some type of loyalty cards. The challenge faced by all retailers is first to convince employees that engagement is important … and that it is a part of their job and, secondly, to help them learn how to engage customers without overpowering and causing customers to react negatively.

Employee engagement has sometimes been defined as “we know it when we see it.” There are, however, a number of slightly different true definitions offered. My preferred one is that of the Towers-Perrins consulting group: Engagement is the willingness and ability to contribute to company success … the extent to which employees put discretionary effort into their work in the form of extra time, brainpower and energy.

While employee engagement is not a new concept, its interest has accelerated in the last few years after The Conference Board, a non-profit business membership and research organization, published a study examining what engagement was then being practiced. Both academic institutions and consulting firms were actively involved in promoting engagement efforts.

It is not surprising that research studies find larger companies have greater difficulty engaging employees than do smaller companies. Employee age makes a significant difference in what drives employees. Younger workers value a challenging work environment and an opportunity for career growth, while older workers value recognition and rewards for their contributions. Are these drivers present for your employees? What can you do to be sure these behavior drivers are improved?

 

Things to look at

Some other important behavior drivers that must be considered in any work setting are:

  • Nature of the job: Is it challenging and mentally stimulating or is it routine and monotonous? For more than 30 years, employers have been facing this challenge; many have done little to reorganize their job duties. What can you do about this?
  • Skill development efforts by employer: What efforts does each manager make to develop the skill level of their employees? Does each employee see the relationship of this skill development to their long-term personal development, job security and employment growth?
  • Perception of career potential in company: Are there potential areas for employment advancement?
  • Managerial trust and integrity: How well do your managers at every level communicate – do they walk the walk and talk the talk: Are they all viewed as persons to be trusted? If not, how would you correct the situation?
  • Line of sight between employee performance and company performance: Does the employee understand how their work contributes to the company’s performance? Does it appear to be important to the employee?
  • Pride about the company: How much self-esteem does the employee gain by being associated with your company? How could this be enhanced?
  • Co-workers/team members: All employees hope for co-workers who do their fair share and are not inferior; such recognition significantly influences one’s level of engagement.
  • Relationship with one’s manager: Does the employee value her or his relationship with her or his manager? All studies, all locations and all ages agreed that the direct relationship with one’s manager is the strongest of all drivers.

According to this business-oriented Conference Board report, employee engagement is a very big deal. There is clear and growing evidence that high levels of employee engagement keenly correlates to individual, group and corporate performance in areas such as retention, turnover, productivity, customer service and loyalty. And this is not just by small margins. While differences vary, highly engaged employees outperform their disengaged counterparts by a significant 20 to 28 percent.

Some companies are responding to the employee-engagement challenge by flattening their chains of command, providing training for first-line managers and with better internal communications. Changes like this will not happen overnight. Often an internal coach or an external consultant will be needed to guide you through the developmental process.

Have you ever asked yourself if many of the employees in your organization are really engaged? If you believe it is about half, you may actually be overestimating the number. According to the Gallup organization study on employee engagement, about 54 percent of employees in the United States are not engaged and 17 percent are disengaged. Only 29 percent are engaged. Think about the potential opportunity for your company to tackle this challenge.

 

A case for engagement

Human resource professionals have intuitively known for years that an engaged work force provides many intangible benefits and can be linked to retention. In the last five years, quantitative research studies have provided compelling business cases regarding the upsides of an engaged work force and the downsides of an unengaged work force. A 2005 study by Serota Consulting of 28 multinational companies found that the share prices of organizations with highly engaged employees rose by an average of 16 percent compared with an industry average of 6 percent.

There are also costs associated with a disengaged work force. Disengagement has been found to cost $243 billion to $270 billion because of the low productivity of this group, according to a 2003 Gallup poll. In one 2003 study by the University of Michigan’s Institute for Social Research, companies with low levels of employee engagement found that their net profit fell by 1.38 percent.

 

Tools to consider

There are dozens of tools and programs offered by consultants that can help increase employee engagement. Let me suggest three that are generally successful and not expensive:

Coaching program for new hires: Research has shown that the first day at an organization is a key factor is determining the level of employee commitment and engagement in the years ahead. Thus, what happens as a new hire comes on board is critical. A variety of coaching programs have been developed to provide a new hire with a coach for the first two to eight weeks. Normally a coach, who is someone in the work group of the new employee, spends time (often during a lunch period) with the new employee on his or her first day and then on a weekly basis during the next several weeks. The coach becomes a nurturing guide through the confusing maze of the new workplace. Is this difficult or expensive?

Career “conversations”: A formal career “conversation” program ensures that managers meet with each of their direct reports on a yearly basis to discuss their potential career advancement and their own career aspirations. These discussions can focus and inspire employees. In addition, managers can spot employees whose job fit is not right before they jump ship. Is this difficult or expensive?

Large group meetings: The level of engagement escalates when 30 to 300 employees representing all parts of an organization gather together to give input to the organization. These meeting can be used to review a vision, plan for the future, review progress to date or introduce a new program such as an employee engagement initiative. This is the best way to reach all employees when there is an important message or a shift in direction. No, do not rely on e-mail or your Web site or video conferencing. Face-to-face communications work best. Is this idea difficult or expensive?

Overall, employee engagement is one of today’s most important business issues. It is a place where managers at all levels are in a position to make a real difference. And it’s not difficult or expensive.

Jerald F. Robinson, Ph.D., is professor emeritus – international management at the Pamplin College of Virginia Tech in Blacksburg, Va. He can be reached at (540) 449-5870 or by e-mail at JFR@vt.edu.

This article originally appeared in the March 2010 issue.

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