Guest Post: The Business Case For Employee Engagement

business case choice

By now, most organisations (ones that want to stay in business, anyhow) understand the importance of engagement to their company’s bottom line — and there are some pretty powerful stats to support it. For example, the Human Capital Institute offers an interesting engagement formula to underscore the link between engagement and performance:

  •  Highly engaged employees return 120 percent of salary in value
  • Engaged employees return 100 percent of salary in value
  • Somewhat engaged employees returns 80 percent of salary
  • Actively disengaged employees return 60 percent of salary in value

Furthermore, according to Gallup, “actively disengaged employees” cost the organisation $3,400 for every $10,000 in salary.1

If you’ve got an employee engagement issue, it could be just the start of a bigger problem – high turnover rates. In fact, low employee engagement is like an early warning system for the departure of top performers.  Research estimates that top performers are two to four times the value of the average employee. 2 This equals a huge cost to replace those who walk out the door because of an engagement problem.  If you watch closely, you’ll also see a few other things leave the premises at the same time — company morale, corporate memory and momentum.

What drives engagement?

Suffice it to say it’s not always about the money. Towers Watson study of the global workforce, Closing the Engagement Gap, identifies top ten global engagement drivers:

  1. Senior management sincerely interested in employee well-being
  2. Improved my skills and capabilities over the last year
  3. Organisation’s reputation for social responsibility
  4. Input into decision making in my department
  5. Organisation quickly resolves customer concerns
  6. Set high personal standards
  7. Have excellent career advancement opportunities
  8. Enjoy challenging work assignments that broaden skills
  9. Good relationship with supervisor
  10. Organisation encourages innovative thinking

The study also states that only one out of five works today is giving full discretionary effort on the job and that four out of ten are disenchanted or disengaged.

 Keeping the scary stats at bay

Chances are that you organisation has its share of disengaged employees (don’t worry, most companies do). Once you accept it, you can move on. And by “move on” I mean it’s time to look at implementing talent management best practices — the practices and processes you can leverage to keep your employees motivated, inspired and contributing to the success of your organisation.

Employee performance management is in many ways at the heart of talent management and has an impact on many of the elements that drive engagement. Among other things, effective managers use performance management to give their employees a framework from which to do their work, setting clear expectations and ensuring that they have the skills, knowledge and training to accomplish their goals.

In the Creelman Research white paper, 5 Performance Management Tactics to Boost Employee Engagement, author David Creelman explores the relationship between five elements usually found in engagement measures and how they link to performance management.

Clarity: People need to know what is expected of them at work. Ensure all employees have clear, SMART goals (specific, measurable, achievable, results-oriented and time-bound) that are aligned with the organisation’s high-level goals.

Support: Employees need to have support—the tools and training to achieve their objectives—to feel engaged. Use performance reviews as well as informal one-on-one sessions to ask employees if they have the support they need.

Fit: Another way managers increase engagement is by ensuring employees can use their strongest skills. Try crafting tasks and related goals to what each employee does best.

Feedback: Research consistently shows that employees want meaningful feedback on an ongoing basis. Ensure employees get the regular coaching and constructive feedback they need to direct their work and improve performance.

Development:  If you develop your employees for the future, you’ll have more engaged employees today.  Provide learning and mentoring opportunities and a culture where regular ongoing discussion about career paths takes place.

One last bit of advice that can go a long way in supporting an engaged workplace culture. Get to know your employees as individuals through regular, ongoing, two-way dialogue. This form of manager-employee relationship building ensures that expectations, performance levels and development needs are understood and addressed as needed.

Sean Conrad is a Certified Human Capital Strategist and Senior Product Analyst at Halogen Software. He writes regularly about employee performance best-practices for the Halogen Software Exploring talent management blog.

  1. US dollars
  2. David Ulrich

About Terry Williams - The Brain-Based Boss

I'm all about engaging people and helping you engage yours to influence behaviour to improve results - at work and at home. Maybe you're a manager, a salesperson, a leader, a parent, a presenter or an event organiser? You need to grab your people's attention, create some rapport, be memorable and influence behaviour change. How can we do that? I'm originally a trainer by trade, turned manager, turned comedian and partway back again. Author of 'THE GUIDE: How to kiss, get a job & other stuff you need to know', I write and speak about how to engage people, be they employees, family or yourself. How can we connect with people’s own internal motivations and help them use their own inner passions to drive towards productivity, success and happiness? And hopefully have a few laughs along the way... As a trainer facilitating learning and development in others, I find myself drawing on my own extensive business experience. I specialise in the delivery of high impact, customised training solutions for organisations that are serious about improving the performance and lives of their people.

Posted on May 20, 2013, in Employee Engagement, The Brain-Based Boss and tagged , , , . Bookmark the permalink. 3 Comments.

  1. Hey there, I just hopped over to your web page using StumbleUpon. Not somthing I might normally read, but I enjoyed your views none the less. Thanks for creating something worth reading through.

  1. Pingback: What Drives Engagement? | thepeopleplan

  2. Pingback: What Drives Engagement? | HR Foundations Total Rewards

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