Engaged Employees Make all the Difference

October 6, 2011

Is employee engagement really important or is it just nice to have and something to think about once economic times improve?

The fact is companies with a high percentage of engaged employees are more profitable than those with fewer engaged workers. High engagement can improve employee retention and raise customer perceptions that directly lead to better financial performance.

Overall, most companies have about one-third of their employees fully engaged in their work. Yet recent surveys suggest that as many as four out of five workers would leave their current job if they could, but most think they would have trouble finding another one right now.

Engaged employees are those who are involved in and enthusiastic about their work. Those who are not engaged are satisfied but are not emotionally connected to their workplace and are less likely to put in extra effort. Those who are actively disengaged are emotionally disconnected from the work and workplace and jeopardize the performance of their teams. Their physical health may also be at risk.

A recent Gallup survey found that in the average big company only 33% of employees describe themselves as fully engaged in their work, 49% say they are not engaged and 18% say they are actively disengaged.

Gallup’s research found there is a strong relationship between engagement and high-performance outcomes which include customer loyalty, profitability, productivity, turnover, safety incidents, shrinkage, absenteeism, patient safety incidents, and quality (defects). They also learned that organizations with a high percentage of engaged employees have nearly four times the earnings per share growth rate compared to organizations in the same industry with lower enagement.

In what Gallup calls world-class organizations, the ratio of engaged workers to actively disengaged workers is about 10:1. Whereas in average organizations, the ratio of engaged workers to actively disengaged workers is about 2:1.

All too often, employee engagement is viewed as an HR initiative to improve morale among employees when things aren’t going so well. These intiatives do little to raise the level of employee engagement, and sometimes they even undermine it. That’s because employee engagement is distinctively different from employee satisfaction, motivation and organizational culture.

In the best companies employee engagement is a strategic approach for driving improvement that is directly linked to achieving corporate goals and organizational change. It can lead to employees who are more emotionally attached, involved and fully commited to their organizations. And it can profoundly increase productivity.

Employee engagement should be an organization-wide effort, and so much of its execution is dependent on good managers. As I wrote about in a previous post, employees join an organization based on the reputation of the company or the quality of its products or service. But they most often leave because of their manager.

In a down economy when hiring is stagnant and organizations are trying to get the most out of the people they already have, managers can engage employees in many ways. This includes clarifying expectations, providing adequate resources, giving recognition, encouraging their professional development, helping them connect to the organization’s purpose, and measuring and discussing progress more often than once each year.

Managers who do these as part of an overall employee engagement strategy are more likely to produce high-quality work and retain employees.

At a time with high unemployment, stagnant wages and workers staying in their jobs only because they fear they cannot find something better, it is the perfect time to execute an employee engagement strategy to energize your people.

In most organizations employees are the biggest expense and, far and away, the greatest asset. Now is the time to invest in a strategy that will raise the number of fully engaged employees and increase your profitability. You’ll be glad you did both now and when the economy improves.

Performance Management Process as a Model for Better Employee Management

November 9, 2010

[Guest Columnist: Today’s post is written by Sean Conrad, a senior product analyst at Halogen Software.]

As managers, we sometimes get caught up in the formality of our performance management process. We focus on the questions in the forms, the ratings, the meetings, the approvals. We forget that performance management is really just about good employee management.

If you peel back all the trappings, you realize that performance management is really about communicating expectations, giving clear direction and context for work, and supporting employee development. Ideally, these are things a manager should be doing every day, not just at performance appraisal time. They are the basics of good employee management, and the performance management process should really just be a way to periodically formalize and document these activities.

Communicating Expectations
To succeed, our employees need to know what we expect of them. This should also include how we expect them to do it. Assessing performance of competencies as part of your performance appraisal process is one way to do this.

You should also have an ongoing discussion with each employee about the competencies that are important to the company and those that are important to their specific role. You should talk about how each competency applies to the employee’s role and talk about when, where, and how they can practice the specific behaviors. Instead of leaving it to annual performance appraisal time, weave discussions about competencies into your day to day dialogue about performance.

Coach your employees to further develop key competencies. Where warranted, assign employees development activities to help cultivate specific competencies. And don’t forget the importance of modeling. Lead by example.

Giving Clear Direction and Context for Work
Performance management processes typically focus on the evaluation of performance on past goals, and the establishment of new goals. As a manager, you should also clearly link each of your employees’ goals to the organization’s high level goals. This helps them understand how their daily work contributes to the organization’s success, and gives them a sense of their value and importance.

But a once a year “set and forget” approach rarely works to direct employees and encourage high performance. As a manager, you should check in with employees on a regular basis to see how they’re progressing.

  • Make sure their goals are still relevant and adjust them if necessary.
  • Discuss challenges and offer help.
  • Review priorities.
  • Answer questions.
  • Explain how their work is contributing to larger organizational initiatives or priorities and update them on organizational progress.

This regular dialogue communicates the importance and value of goals to your employees. It also communicates your commitment to your employees and to their success.

Support Employee Development
As you work with your employees and dialogue about competencies and goals, stay alert to “teachable moments” and “learning opportunities”. Your ultimate goal should be to help your employees improve and succeed.

While your annual performance appraisal meeting is a great time to discuss learning needs and put formal development plans in place, you should really keep the focus on learning all year long.

Look for opportunities to coach your employees or teach them more about the larger organization, its mission, purpose, challenges, industry, etc. Model the skills or behaviors they need to further develop and give them tangible — in the moment feedback — on their performance. Offer a variety of learning opportunities, including books, articles, seminars/webinars, job shadowing, workplace buddying, post-mortems, etc. Make it okay to make mistakes as long as they’re leveraged as learning opportunities. And coach, coach, coach…

Leverage the Power of Performance Management by Making it a Year-Round Activity
Performance management shouldn’t be a once a year formality. The activities it encompasses really form the foundation of good employee management, and should therefore be year-round activities. By communicating expectations, giving clear direction and context, and supporting development, you foster strong performance and ultimately organizational success.

Sean Conrad is a senior product analyst at Halogen Software, one of the leading providers of performance appraisal software.