The Costs Of Ignoring Employee Engagement

To some in management, the fact that their workers get a paycheck from the company is the beginning and the end of any consideration they deserve. That attitude will cost you.

Recently, in the season finale of the Showtime series, Shameless, the character of Fiona, a 20-something head of household who has been desperately seeking a good, steady income, pulls out all the stops to get a job as a salesperson at a cup-manufacturing company.

And her efforts pay off. She nabs the job and is congratulated by a woman in middle management. That woman then relates how she first sat at Fiona’s current desk 20 years ago when she was hired. Fiona’s joy suddenly turns to shock and dismay, as she eyes the unhappy workers around her in their small cubicles and suddenly feels trapped by the next two decades.

Shameless | Fiona at the cup-sales office

Will she be a happily engaged employee? That scene indicates no—and it’s a scene that’s continually duplicated all across the world at various companies. In these still-difficult economic times, people often jump at any job they can get, without any long-term thought toward whether the position matches up with their personality and skill set, let alone their long-term ambitions in life. Not only that, but many employers feel that employees should be grateful just to be working, not to mention many managers themselves are in the wrong job or don’t really want to be where they are, which translates into a lack of concern for new employees.

Employers and potential employees both have a responsibility to make sure a position is a good fit. Beyond that, however, a company’s style of management bears a great deal of credit or blame as to whether someone like Fiona ends up a happy and engaged worker, or as just another 9-to-5er going through the motions until quitting time.

But as long as the job gets done, does employee engagement matter? Turns out it does, very much. Gallup did an extensive study of the effect of high employee engagement in 2012. They looked at almost 50,000 businesses that included roughly one and a half million employees in 34 countries and discovered that work organizations that score in the top half of employee engagement have double the odds of success of those in the bottom half. Not only that, but those at the 99th percentile of engagement have four times the success rate.

This is the eighth year Gallup has done a study like this, and the results have been remarkably consistent each time. And if you’re wondering what the bottom line with low employee engagement is, it’s estimated to cost the U.S. economy roughly $370 billion a year.

That fact alone is why employee engagement is a major part of my mission and why I contributed a chapter about this issue to last year’s book Women Who Mean Business. High employee engagement is actually critical to a company’s performance and, according to Gallup, it impacts nine key performance outcomes in these ways:

* 37% lower absenteeism
* 25% lower turnover (in high-turnover organizations)
* 65% lower turnover (in low-turnover organizations)
* 28% less shrinkage
* 48% fewer safety incidents
* 41% fewer patient safety incidents
* 41% fewer quality incidents (defects)
* 10% higher customer metrics
* 21% higher productivity
* 22% higher profitability

Obviously, those kind of double-digit increases are impressive and something any manager or business owner would enjoy experiencing at their operation. But how do you influence this type of intangible in a meaningful manner?

I’ve written extensively here about how collaborative leadership is critical to successful management in the 21st century. “Just do your job” may have been the default response to dissatisfied workers in times gone by. But then, as now, that kind of attitude has never inspired any kind of satisfactory improvement.

Acting more as a “chief influencer” rather than a chief executive is in management’s best interest as well as an employee’s because it causes employees to respond in a positive and proactive way to their work challenges.

Here’s more research that proves it: Towers Perrin did a global workforce study that pinpointed the five key areas that increase employee engagement:

1. The organization is the most powerful influencer of employee engagement. In other words, the structure of management systems and processes heavily affect the level of a worker’s interest in his or her job, as I noted earlier.

2. There is no single “right model” for a high-performance culture; the most effective approach depends on an organization’s strategic priorities. We all should avoid a “one-size-fits-all” approach to influencing workplace attitudes; obviously how a corporation like Apple manages its culture is going to be different from how a company like J.C. Penney does things. Which may be one reason why this didn’t work out too well.

3. Employees are eager to invest more of themselves to help the company succeed, but want to understand what’s in it for them. If workers feel they have no road to advancement or achievement, that’s a big turn-off when it comes to engagement. What’s the point in trying harder if there’s no end game in sight? Who wants to play a game where there’s no way to win?

4. Senior leaders need to make the leap to a more inspirational and engaging style of leadership to help drive higher engagement. The more management makes an honest and meaningful effort to connect and motivate workers, the more workers will feel connected to the company and its goals. When, instead, orders are just sent down willy-nilly without explanation, employees feel like disposable cogs in a machine.

5. Companies need to understand their employees as well as they understand their customers to design a work environment and experience that will drive higher engagement and performance. It’s not at all unfair to view your employees as “customers.” You motivate customers to buy more by engaging with them and anticipating their wants and needs. Well, it’s not much different with those you manage; you motivate your staff to achieve at a higher level through the same process.

A big secret of success for any relationship, personal or professional, is to personally demonstrate a high degree of caring about the other person. To some in management, the fact that their workers get a paycheck from the company is the beginning and the end of any consideration they deserve. That attitude, however, ends up turning off employee enthusiasm—as well as ultimately harming the bottom line.

And speaking of that bottom line, always remember: employees are your most valuable asset.

[Image: Flickr user Florian | Shameless Image: Showtime]

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9 Comments

  • KareAnderson

    Julie
    What a powerful and actionable mix of insights and tips. One way to  spur employee engagement can also optimize their performance: support and train them to be adept, authentic and articulate ambassadors of the company brand and thus also their own. In so doing, employees can hone their strongest talents, build esprit de corps and self-organize to respond faster to opportunities and problems, as I describe here http://www.forbes.com/sites/ka...

  • Ben Simonton

    Well said Julie and certainly a major issue for every company. As you say, "A big secret of success for any relationship, personal or professional, is to personally demonstrate a high degree of caring about the other person."

    The gains listed by Gallup are very low compared to the actual opportunity. Stephen Covey senior wrote that the possible performance gain is 500% and Peter Hunter recounts the same orders of magnitude http://www.breakingthemould.co...

    My own experience in several successful turnarounds makes me agree with Covey and Hunter. My formula was very simple and easy to execute. Here it is in brief.
    Rather than spending its time trying to control employees with goals, targets, orders, bureaucracy, and the like thus disengaging them, management listens to whatever employees have to say. Management does this often enough to more than satisfy the employee's need to be heard. Management then responds to what was said in a timely and respectful manner to the satisfaction of the employee or better thus satisfying the employee's need to be respected. Once employees realize this will always be done, they realize that they can influence everything in the workplace. This ability to influence everything begets a sense of ownership - that this is their workplace just as much as it is anyone's. In the same way, a sense of ownership begets commitment. This process also satisfies the employee's needs to have competence, autonomy, and relatedness and with all needs satisfied, they will choose to become engaged.

    Thanks for publicizing such an important issue that is not well understood.

    Best regards, Ben
    www.bensimonton.com

  • Alfred Poor

    Excellent post! I'm particularly struck by the "understand their employees" recommendation. I work with companies to help them understand their "next-gen" employees, and understanding why these young workers behave the way they do is essential to helping them become productive within the existing corporate structure and culture.

    Alfred Poor
    www.alfredpoorspeaker.com

  • Janhills

    Interesting article. However I think research points to the immediate boss being the most influential in engagement.  Also neuroscience, the science of how the brain works is beginning to draw attention to factors that can help the immediate leader of a team manage their own approach to help engagement. This video summaries some of the science and the implications for leaders. http://bit.ly/122zRBs

  • Galen Pearl

    I worked for a well known company years ago that spent more effort on its "internal" PR than it did on its very successful ad campaigns. Even though the company was large, there was a sense of family and shared enterprise. You felt special because you worked there. Unions couldn't even get in the door because everyone felt valued and treated fairly. 

  • Bettekrakau

    I am researching what matters most to employees for job satisfaction. Please participate in an ongoing research project by taking a brief survey at http://whatkeepsyou.csiprogram.... At the end of the survey, view the overall survey results to date.

  • MarySchaefer

    Hi Julie.  This is one of the most important points in your piece:

     "Senior leaders need to make the leap to a more inspirational and engaging style of leadership to help drive higher engagement. The more management makes an honest and meaningful effort to connect and motivate workers, the more workers will feel connected to the company and its goals..."

    I have seen to may senior leaders and teams behave as if everyone needs to change but them. 

    What do you think the block is, and how do we help more people through it?

  • Robert Gately

    Employers have three choices.

    1. Hire/promote competent applicants (or train them to become competent).

    2. Hire/promote competent applicants (or train them to become competent) who fit the culture. 


    3. Hire/promote competent applicants (or train them to become competent) who fit the culture and who have the talent for job success. 



    All three choices give us competent employees. 



    Choice 2 gives us competent employees who are not misfits in the culture. 



    Choice 3 gives us competent employees who are not misfits in the culture and who have the talent for job success. 



    Identifying the talent required for each job seems to be missing from talent and management discussions.

    If we ignore any of the three criteria, our workforce will be less successful with higher turnover than if we do not ignore any of the three criteria.

    1. Competence
    2. Cultural Fit
    3. Talent

    There are many factors to consider when hiring and managing talent but first we need to define talent unless "hiring talent" means "hiring employees." Everyone wants to hire for and manage talent but if we can't answer the five questions below with specificity, we can't hire or manage talent effectively.

    1. How do we define talent?
    2. How do we measure talent?
    3. How do we know a candidate’s talent?
    4. How do we know what talent is required for each job?
    5. How do we match a candidate’s talent to the talent demanded by the
    job?

    Most people cannot answer the five questions with specificity but the answers provide the framework for creating an engaged workforce.