(Editor’s Note: This is the first in a two part series on employee engagement.)
Now that the job market is improving somewhat, organizations have started to think more about retention, and the concept of “employee engagement” is being bandied about in offices across North America and Europe. But what exactly is employee engagement, how do you know if you have it, and why should anyone care?
Let’s begin with a simple definition. Employee engagement is a person’s degree of attachment to their company, role, and co-workers. When employees are engaged, managers don’t have to force them to perform or monitor every task. Rather, they are intrinsically motivated to do what’s in the best interest of the organization and can be trusted to do terrific work.
Employee engagement is not the same thing as employee satisfaction. The latter term was invented during the industrial age, when factory owners needed to ensure that masses of angry workers didn’t mutiny. Satisfied employees don’t treat the organization as part of their family like engaged employees do, but they also aren’t gunning for its demise.
How Do You Know If People Are Engaged?
To some extent, it’s easy to tell if an employee puts in that intangible but emotionally charged extra effort on the job. But for those who like metrics, the good news is that there are many reliable ways to measure employee engagement. Gallup, for one, has based its survey model on more than 30 years of in-depth behavioral economic research with 17 million employees.
The company’s researchers identified 12 core elements, which they called the Q12, that predict employee and team performance and also link to essential business outcomes. The questions include:
- Do you know what is expected of you at work?
- Do you have the materials and equipment you need to do your work right?
- At work, do you have the opportunity to do what you do best every day?
- In the last seven days, have you received recognition or praise for doing good work?
- Does your supervisor, or someone at work, seem to care about you as a person?
- Is there someone at work who encourages your development?
- At work, do your opinions seem to count?
- Does the mission/purpose of your company make you feel your job is important?
- Are your associates (fellow employees) committed to doing quality work?
- Do you have a best friend at work?
- In the last six months, has someone at work talked to you about your progress?
- In the last year, have you had opportunities at work to learn and grow?
It’s easy to create a similar questionnaire to track engagement in your organization. You can ask these questions monthly, quarterly, or annually and have employees rate how much they agree or disagree on a scale of 1 to 5.
Why Should You Care?
It has been well demonstrated that the advantages of an engaged workforce include increased productivity, retention, and customer satisfaction.
Engaged firms have higher profits too. According to the Towers Perrin Global Workforce Study, high-engagement firms grow their earnings-per-share (EPS) at a faster rate (28 percent) while low-engagement firms experienced an average EPS growth rate decline of 11.2 percent. Likewise, HR consulting firm Hewitt Associates found that highly engaged firms had a shareholder return that was 19 percent higher than average.
Even the organizational psychologists are singing the praises of employee engagement. A study in the Journal of Applied Psychology claimed that resulting impact on revenue ranged from $960,000 to $1,440,000 per year per business unit when comparing those companies in the top quartile on employee engagement versus those companies in the bottom quartile.
On the flip side of employee engagement is employee disengagement, and this presents an even bigger issue. Before continuing with the discussion of disengagement, let’s characterize three types of employees:
Actively engaged: These employees are always looking for ways to improve and work more efficiently. They go above and beyond the call of duty to exceed expectations so that the company is more successful.
Not actively engaged: These employees show up to work and do their jobs, and leave as soon as the clock strikes 5PM. They may be happy enough with their work, but have no desire to excel or help take the organization to new heights.
Actively disengaged: These employees are holding a grudge against the organization and look to undermine it at every turn. They are the most dangerous because their negative attitude is contagious and can result in very real performance and morale problems.
In the U.S., the estimated cost of disengagement in the workplace, which includes the actively disengaged and the not actively engaged, is over $350 billion in lost productivity, accidents, theft and turnover each year. Gallup recently found that approximately 71 percent of American workers are not actively engaged or actively disengaged.
When you consider these numbers, it’s no surprise that the majority of employees would be happy to leave their current organizations if a better opportunity presented itself. And this is going to be expensive. According to Ross Blake in his article Employee Retention: What Employee Turnover Really Costs Your Company, talent replacement costs an organization between 30 and 50 percent of the annual salary of entry-level employees, 150 percent of middle-level employees and up to 400 percent for specialized, high level employees.
Hopefully you’re now convinced of the need to address employee engagement with a fresh eye. Later this month, we’ll explore some ways managers can improve team member engagement.
(Photo credit: Business Engaged via Shutterstock)