Employee engagement is an effort not to be ignored in order for the organization to go to next level. Many managers pay only lip service for such effort.
The Power of Employee Engagement
From The EarthAsylum Leadership Circle Newsletter
August 1, 2006
Volume 1 - Issue 3
By now, many of us have heard the buzz on employee engagement – so much so that the buzzword is loosing its value. Talent management and employee engagement, just like other buzzwords and business fads, really do have value – if we understand their true meaning and don’t let them get diluted with misconceptions.Think about it… When companies are often trying to improve performance with fewer people and decreasing resources due to cutbacks and financial pressures, discretionary effort is the grail managers are seeking. Employees who freely give that extra effort are of tremendous value.
General studies show that a 5% increase in employee engagement results in a 2.5% increase in growth. Growth measured by company value, which in the public sector is measured by stock value.
The relationship between employee engagement, high performance, and company growth is compelling to say the least. Unfortunately, national surveys of company managers show an overall dissatisfaction with employee engagement levels and measures of employee engagement show a very distressing picture...
The Three Levels of Employee Engagement
Highly Engaged employees are builders. They want to know the desired expectations for their role so they can meet and exceed them. They're naturally curious about their company and their place in it. They perform at consistently high levels. They want to use their talents and strengths at work every day. They work with passion, and they have a visceral connection to their company. And they drive innovation and move their organization forward.
Moderately Engaged to Not Engaged employees are the largest group. Those that put their time in and take a wait-and-see attitude towards their job, co-workers, and employer. They aren’t a negative force at work but neither are they a positive force.
Actively Disengaged employees are those fundamentally disconnected from their jobs. The actively disengaged counter the productivity of engaged and highly engaged employees. They miss an average of 3.5 days more than other employees and cost the U.S. economy between $292 billion and $355 billion per year.
For most businesses, only 14% of their employees are highly engaged and upwards of 24% are actively disengaged.
(I’ve seen these numbers vary – from a low “highly engaged” number of 5% to a high of 17%, and a low “actively disengaged” number of 19%.)
The Cost of Low Employee Engagement
So what is the cost? Let’s assume...
- A business has a payroll of ten million dollars.
- Highly engaged employees are 90% productive (probably higher).
- Moderately engaged and not engaged employees average out at 70% productivity.
- Actively disengaged employees are 50% productive (probably lower).
- 15% are highly engaged employees and are 90% productive.
- 65% are moderately engaged employees and are 70% productive.
- 20% are actively disengaged employees and are 50% productive.
Overall productivity level = 13.5% + 45.5% + 10.0% = 69%.
$10,000,000 annual payroll * 69% productivity = $6,900,000 ROI.
or
$3,100,000 lost on unrealized productivity.
However, it gets worse. The 19% to 24% of actively disengaged employees not only give a comparatively low level of effort, they undermine the efforts of others thus decreasing the effective productivity of the entire staff. Furthermore, if these employees are in customer-facing roles, they can cost the company current and new business.
The really scary part is that national averages show the number of actively disengaged employees going up - from a low of 16% in the mid 90’s to a high of up to 24% today.
What Can We Do To Increase Engagement?
The most critical element to employee engagement is the front-line manager.
Managers need to discover and develop employees' talents if they want to keep them engaged.
Employees must have a strong relationship with, and clear communication from, their manager.
Managers have to challenge employees within their areas of talent, and then help them gain the skills and knowledge they need to build their talents into strengths.
Managers should help employees develop ownership of their goals, targets, and milestones, so employees can enhance their contributions to the company and increase their impact.
In the last article on employee engagement, we talked about what engagement is, the relationship between employee engagement, high performance, and company growth, and the cost of low employee engagement levels. Sources For This Article
In this article, I want to focus on what a manager can and needs to do to raise levels of engagement. But first, let's build a little on the definition of Employee Engagement ...We stated in the last article that employee engagement is "the extent to which employees put discretionary effort into their work, in the form of extra time, energy and brainpower". A good definition to be sure but there's more to it than that.
Employee engagement can be broken down into two areas - the first being emotional and the second, rational. Within these we can define 9 core statements that characterize engagement.
The 9 Core Statements of Engaged Employees
Emotional- I would recommend my company to a friend as a good place to work.
- My company inspires me to do my best work.
- I am proud to tell others I work for my company.
- My job provides me with a sense of personal accomplishment.
- I really care about the future of my company.
- I understand how my unit contributes to the success of my company.
- I understand how my role is related to my company's overall goals, objectives, and direction.
- I am willing to put in a great deal of effort beyond what is normally expected to help my company succeed.
- I am personally motivated to help my company be successful.
Managers Make The Difference
As was concluded in part 1, the most critical element to employee engagement is the front-line manager.- Managers need to discover and develop employees' talents if they want to keep them engaged.
- Employees must have a strong relationship with, and clear communication from, their manager.
- Managers have to challenge employees within their areas of talent, and then help them gain the skills and knowledge they need to build their talents into strengths.
- Managers should help employees develop ownership of their goals, targets, and milestones, so employees can enhance their contributions to the company and increase their impact.
Additionally, managers cannot do it alone. The organization must adopt a "talent management" culture in order to make engagement initiatives successful.
That being said, let's look at a few critical fundamentals that will lead to positive results.
Four Fundamental Actions Leading to Positive Results
1. Clarify ExpectationsCreate Goal Statements that formalize the following:
- What is to be accomplished
- Who will be involved
- When the activity will be completed
- How much it costs and which resources will be used
-Positive Results will most likely include:
For the employee -
- Less frustration and stress - clear direction
- Higher level of motivation and satisfaction
- A common or shared language
- More effective communication with manager
- More effective communication with team member
- More focused and productive team member
- Higher productivity and accomplishment of business goals
- A common or shared language
2. Don't Leave Employees Out Of The Plan
Even the best plan can fail if the employees are not committed to it
Get Commitment
Get Accountability
-Positive Results will most likely include:
For the employee -
- Higher level of motivation and engagement
- Ownership to the process and to their own development
- Commitment and accountability to the plan
- A better performance plan overall - dual input
- Higher level of commitment and accountability from team members
- Streamlines work processes, saves time and money
3. Meet On An On-Going Basis To Share Feedback
Increase effectiveness of communication
Increase competence and confidence
Increase productivity and accuracy
Encourage a higher standard
-Positive Results will most likely include:
For the employee -
- Recognized for what they are doing well
- Learn if "off course", receive guidance, and improve performance
- Clearer sense of what's expected if goals change
- Less frustration and stress due to more timely feedback and input
- Time and opportunity to provide critical feedback
- Learn valuable information and gain insights
- Increased commitment, quality standards and productivity levels
- More insight into potential talent and development opportunities
- Increased quality of communication
- Increased levels of credibility and trust w/ team members
4. Providing Factual / Behavior-Specific Feedback
Give specifics and facts of performance
Be clear about what changes are needed
Provide objective guidance and direction
Focus on behavior vs. attitudes or personal characteristics
Solve problems and move forward
-Positive Results will most likely include:
For the employee -
- Commitment and accountability to changing their behavior
- Feels treatment is fair, professional
- Information provided is tangible, practical and actionable
- Clarifies performance outcomes
- Cultivates a more healthy environment
- Increases levels of credibility and trust w/ team members
- Focused team members, leading to:
- More timely results
- More accurate results
- More productive teams
Conclusion
The four fundamentals outlined above are only a starting point, albeit a good starting point. They are generic to the desires and talents of individual employees but are essential to all employees. As you know, management cannot be covered in an article or even a series of articles. It is far too complex an issue. But by successfully implementing a handful of procedures, managers can achieve dramatic results leading to higher levels of engagement.In the future, we'll go beyond the fundamentals and talk about Strengths Based Performance, intrinsic motivation, the power of empowerment - and how these topics relate directly to employee engagement and the bottom line.
URL: http://www.strengthsmanagement.com/newsletters/2006_09_01.php#Article1
Sources For This Article
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