The Employee Engagement Trend

On first glance, employee engagement sounds a little like a fad diet. Word starts spreading about how to increase energy and shed the pounds, and suddenly everyone’s buzzing about it. But if you dive in head first, you’re likely to overlook something. Feeling grumpy while sipping nothing but cayenne lemon water for a week? Chances are your employees will end up disengaged if you’re twisting arms for participation.  

Instead, successful employee engagement is the result of small, incremental behavior and cultural changes. Fostering an environment that encourages participation and cooperation keeps employees wanting more.

A brief history.

As far as we can gather, the term “employee engagement” first started appearing in academic journals in the early 90s. During the 70’s and 80’s, HR’s focus was on employee satisfaction.At the time, measurement focused on the employee’s performance of tasks rather than their relationship with the organization. As the job market shifted from a manufacturing to a service economy where intellect and knowledge were the primary drivers of success, employers needed to be more flexible, leaner and more competitive.

Focus turned from satisfaction to commitment.

The contract changed from “we’ll give you lifetime employment if you work hard,” to, “If you show you’re committed and loyal to us, we’ll give you stable employment and marketable skills.”

The old mantra that staff are your greatest asset becamestaff are your only asset. A Gallup study illustrates that companies with world-class employee engagement have 3.9 times the Earnings per Share growth rate, compared with organizations with lower engagement in the same industry.

What does this mean? The potential for success is there, and engaged employees are the key.

So, what does it mean?

Levels of engagement can influence an array of different factors within an organization. Employee motivation, job satisfaction, organizational commitment, discretionary effort, productivity, company culture, management support, retention are all drastically susceptible to an employee’s level of involvement.

Creating opportunities for involvement and building a corporate culture motivates a workforce of dedicated, loyal employees. The attitude an employee holds toward their work or employer determines the level of effort he/she applies when performing their job. This in turn delivers savings and increases productivity.  Dictating a culture of employee engagement is a workplace approach to managing your business though your workforce.

The results are remarkable.

• A 2009 Gallup poll  found that shareholder return for companies with high levels of engagement was 19% higher than the average versus returns of 44% below average for those with low levels.
• Companies with large numbers of dissatisfied workers experienced turnover that was 51% higher than their peers.
• Best Buy found that for every 10th of a point increase in a store’s employee‐engagement scores, it saw a $100,000 increase in operating income.
• Towers Watson found highly engaged performers miss 20% fewer days of work and are almost 80 percent more likely to be top performers.
• Engaged employees are 20% more productive that the typical employee.

The numbers tell a clear story: employee engagement is great for your bottom-line and for your employees. 

So, where do you start?

Employee engagement begins at the top with front-line and senior management and filters its way out into the workforce. Ask yourself, if you don’t take your corporate culture seriously, why should your employees?

Five or six years ago, employers worried that engagement programs were:

1. Difficult to develop
2. Difficult to implement effectively
3. Challenging to scale globally
4. Confusing to measure.

With the rise of programs today, these challenges can be solved. The increase in digital and mobile platforms, comprehensive and effective programs are not only easier to roll-out and scale broadly, but are “highly measurable and defensible from an ROI standpoint.” The trick is in finding a program that works best for your company and culture.

Within the Vocoli platform alone you can watch as your employees collaborate, brainstorm, contribute suggestions, and vote on their favorite ideas, working together to better your business.

Keep in mind that these programs create a halo effect, so even non-participating members become aware of the growing sense of community and participation.

Successfully building an engagement program

The key to building and measuring a successful program is integrating your important data. The home improvement mega store, Lowe’s created and implemented their engagement strategy by learning to link their HR improvements and investments to measurable data, focusing on impact on operating income, net income growth, and earnings per share.

The article “Connecting People Investments and Business Outcomes at Lowe’s” by Cedric T. Coco published in issue 34 of the Journal of People and Strategy explores the company’s process of using analytics to link engagement to business performance.  The most successful example for the company was the relationship engaged employees had on the average ticket, or amount of money spent per transaction. In the scenario of buying a gallon of paint, the difference comes down to customer service. By investing in employee training and leadership management they began to create a sales force that can really sell. A disengaged employee shows a customer to the correct isle or rings them up at check out. An engaged employee is more likely to ask “What project are you working on?” From that question the employee has sparked a discussion. Now they may then use their wealth of Lowe’s home improvement knowledge to suggest additional products and ideas to the customer. This level of dialogue and support makes Lowe’s customers more confident in their decisions, drives sales and builds customer loyalty.

By aligning HR with their business priorities Lowe’s quantified relationships with metrics and financial impacts. Redefining the pillars of their human resources and rewriting a HR-centric business plan allowed them to track, measure, and change existing investments and programs. 

So, as it turns out, there’s a lot of well researched logic behind the hype.

Employee engagement isn’t just about forcing participation in your office. Instead, developing a company culture provides the foundation of a better business. Bringing the right numbers together and tracking the positive influence of HR reveals a world of success. Unite your workforce and once again prove that happier employees do better work.