Low employee engagement is a company killer. According to a 2012 report, companies around the globe are spending $720 million USD a year on improving their engagement levels. However, according to the Gallup report, only 30% of employees are actively engaged. What’s more, disengaged employees cost the American economy $350 billion a year. The notion that engagement is driven primarily by good or bad management is outdated and often shrouded in misunderstanding. Today, employees are looking for a sense of purpose in their jobs, a feeling that they’re part of something bigger than themselves. New research suggests that this feeling isn't just empty speculation and realigning employment engagement becomes a business imperative.
Challenge one: Companies focus on bottom line, not employees.
Employee engagement occurs when employees know what to do, and when they want to do it. The engagement process is, in essence a partnership, whereby employees and leaders must mutually engage to grow the business. Companies need to look further than the bottom line and engage with employees to get the most out of their productivity. Success today requires a bit more than just focusing on making a profit. When employees are not actively engaged, it has detrimental effects on the organisation.
Companies make engagement happen by fully aligning the business strategy with the talent strategy. Less than half of global employees think they are paid fairly for what they contribute to the company's revenue. This is exacerbated further when employees openly know when their leaders earn a substantial amount more than them. In a Glassdoor study, it found that typical CEOs earn an average of 204 times more the median worker salary. Those companies whose CEOs earning the most, saw an overall satisfaction rating of 2 and lower (out of 5).
Tower Perrins found a direct correlation between employee engagement and business success. Companies with low engagement scores earn an operating income of 32.7 percent less than companies with engaged employees. A thirty year study conducted in 2012, found that companies with enthusiastic employees consistently outproduce and outperform their less satisfied counterparts. When a company's sole focus is business metrics, such as sales growth, lowering cost of goods sold and reducing turnover, employees feel unappreciated for their efforts.
When companies don’t focus on internal equity - how the highest paid executives pay compares with that of everyone else in the organisation - they risk losing their own employees dedication, drive and focus. Smaller gaps makes for greater solidarity, and as a result better performance, throughout the workplace.
An American supermarket chain believes in capping the maximum salary a CEO or an executive can earn. Whole Foods, believes that through capping all executives pays to $650 000, (a ratio of 19:1), it boosts employee engagement and leads to better financial results. And it shows. Employees feel that they are appreciated for their contribution to the success of the business. What’s more, Whole Foods gives every employee the ability to see everyone's salaries and the power to vote on new hires. This enables them to choose whom they work with, which enables better team chemistry as well as greater individual gain. This transparent process, not only motivates the workforce, but encourages them to further develop their careers within the organisation. By knowing what their leaders earn, and the benefits they get, it drives individuals to become leaders themselves. 90 percent of Whole Food managers and 10 percent of the top executive started off working elsewhere in the company. The current president of the South region started working in one of the juice bars.
Challenge two: Leaders are not inspiring.
The primary concern of business leaders today is to increase productivity, output, and innovation. However, going about this is difficult when employees are not on the same page. Employee satisfaction and emotional states are regarded as intangibles, which difficult to understand and measure. When employees feel they are not fully committed and enthusiastic about their work, it’s up to the manager to understand why this is so. A superior approach would be to understand what motivates and drives employees in the workplace. By broadly understanding the factors that increase productivity, that motivate employees to perform, and that increase the efficiencies in the workforce, managers enjoy better levels of engagement. However, an employee may be fully engaged and emotionally tied to the organisation but without the proper leaders no amount of motivation commitment will improve their outputs.
Having leaders who inject life into the organisation is vital to the ongoing success of the company, and managers who have the ability to inspire their employees generally enjoy happier employees. One of the root causes of unengaged employees is the top down managerial approach. Managers who dictate to their employees what they should and should not be doing, leads to a work environment in which employees feel aloof and impartial to their work. The problem lies with the manager not understanding the employee and how to bring the best out of them. In a Tower Watson survey, it uncovered that employee engagement arises when people experience a combination of effective and caring leadership appealing to employee development opportunities. When leaders decisions and actions reflect employee concerns, engagement goes up. A simple pat on the back in front of the team has great power to motivate an employee further.
One way of inspiring employees is through emotionally engaging storytelling. If employees can envision what their leaders envision, it creates a work environment that is aligned to accomplishing one goal. Leaders who are truly inspiring, drive the company toward success and emotionally resonate with their team members. One such inspiring leader was the former co-founder and CEO of Apple Inc. Steve Jobs. With the help of his team, he created a legacy that changed the way the world saw computers forever. Jobs always thought of himself as an artist, and actively encouraged his design team to think of themselves in this way too. The vision he fostered was never to beat the competition, or to make a lot of money, but rather “do the greatest thing possible”. With this belief, his team of “artists” created more than just a product, they created art. One moment that defined this belief was when Steve Jobs encouraged each and every one of the individuals on the team to sign their names on the inside of the computer casing. Since it required special tools to look inside the Mac, the public would never see this, but the team took pride in knowing that their names were there.
What’s more, Jobs was a master of understanding that people wanted to be part of company that created something exciting. One such example shows exactly how every manager should go about inspiring engagement in the workplace. To motivate a team of young developers, Jobs told a story about a software developer who had already come on board for a new application project.
“This is a developer I've known for a long time. I gave him a call and I said, 'We've got something really secret we're working on and I can't tell you what it is, but I want you to put all your source code on a hard disc and fly out here... I think you're going to be very pleasantly surprised."
By telling the story he was able to captivate the curiosity of his team and encourage them to take a leap of faith and experience the same. Jobs was able to actively engage with his team and portray his vision in a unique way. When employees feel they are emotionally vested in the company, they strive to achieve the same vision. However, when a company focuses on the bottom line indicators, it hampers employees performance.
Challenge three: no road to advancement or achievement
In today’s business environment, many employees are expected to put 120 percent of the time dedicated to their careers. It’s no wonder that they become complacent and agitated when the opportunity for professional growth lacks. A recent survey found that when employees lack this opportunity it contributes to low engagement and high employee turnover. People want to improve their skills and broaden their knowledge, and the recognition of professional development is a huge motivational factor. When managers appreciate employee growth, it motivates them to achieve more. Creating an environment where employees are inspired, encourages them to succeed, and complements the overall business success. In fact, companies with highly engaged employees, produce shareholder returns of 9.3 percent higher than the S&P 500. Clearly outlining where the employee’s key strengths and core competencies lie, creates a transparent environment and clarifies the employee's road to success. Recognising employees has become an increasingly important talent management tool, and organizations that create a culture where people feel appreciated for their work, have higher levels of engagement, and lower levels of employee turnover. However, creating this type of recognition culture takes time.
North Shore-LIJ Health System believes its competitive advantage is its workforce. The leaders of the organisation realised that their people perform best when they feel appreciated for their work. Consequently, this lead them to develop a comprehensive approach to employee recognition. Going forward, managers would recognise employees efforts on an ongoing basis.
The main focus would remain on appreciating employees for engaging in activities that would impact the organization's three primary business goals (patient experience, quality and financial performance) and their six core values This created a mutually beneficial message, where employees clearly understood the behaviours that were expected to exhibit and the outcomes they had to achieve. Recognition types ranged from yearly “President’s award program” (where employees received $10 000 and a trip for two to a destination of their choice) to a daily thank you card (a gift card up to $100 dollars). While the company implemented these programs to specifically focus on increasing the frequency of recognition, it also made significant changes to the performance management process (making it a continuous conversation, rather than an annual one).
Since the program has been implemented the organization has seen an improvement in both the quality of care and in its financial indicators. Recognition contributes to the success of the company, and that makes a huge impact on morale, engagement, and individual commitment. According to a spokesperson at the company, surveys indicated employees feeling valued and respected (saying things like:“I feel lucky to work with such talented and caring people” and “I feel appreciated for my commitment to the organisation”). This typically correlated to higher patient satisfaction and, ultimately, improved business outcomes. Organisations with the most sophisticated recognition practices are 12 times more likely to have stronger business outcomes, and often this level of appreciation comes from the leaders of the company.
Low engagement can be detrimental to the long term success of any company. When organisations are spending a substantial amount on the engagement activities of its employees, its paramount they understand what the key challenges are and how to overcome them. By ensuring employees have a clear road to career advancement, companies can enjoy lower rates of employee turnover. The key to finding where these which employees are is through continuous conversations between the manager and the employee. Having the communication channels open and as transparent as possible, creates an environment in which the employee feels heard and appreciated. Impraise, a company that focuses on bringing employee focus back to the company, has created a platform whereby employees can give and receive feedback on a continuous basis. What's more, this platform allows the organisations to easily understand where their key employees strengths are and where the weak employees may need training.
Managers also need to know where they stand with their employees. Through manager feedback, leaders can understand how their subordinates see them, and where they can improve. By soliciting manager feedback conversations, it ensures that employee engagement remains high, as employees have the freedom to express exactly how they see the manager and where they fall short. The key to addressing the concerns of employee engagement is through communication, and by constantly asking, companies can solve engagement issues before they hinder the company's success.
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