Employee Engagement 101

The idea of creating a more engaged workforce is not a new idea. For more than 20 years, managers have been looking at the organizational factors, which engage (or disengage) employees. Research studies have been conducted to show the link between an engaged workforce and organizational performance. While some research remains inconclusive, there is a growing body of work that suggests a link between employee engagement and organizational performance does Employee Engagement 101 exist. One study found that employees who responded more favorably to survey questions on engagement also worked in business units with higher levels of productivity, profit, retention and customer satisfaction. These researchers also found that the manager, not the pay, benefits, perks, etc. was the key in building and sustaining a strong workplace.

For 50+ years, companies have been surveying their employees and customers to determine their level of satisfaction. At present, about 50 percent of Fortune 500 companies conduct formal employee engagement surveys. In addition, thousands of smaller companies also conduct such surveys.

After thousands of surveys, a set of "best practices" actions has emerged to guide companies in conducting engagement surveys. Foremost, if you are going to conduct an engagement survey, you must have a strategy in place to implement the results. Researchers from the Gallup Organization in the book “Follow This Path concluded that only 25 percent of employees in companies that conducted engagement studies said they were engaged. One of the primary reasons, according to the research, was that the employees didn't believe that management had any interest in making changes based on what they said in the surveys. In short, the studies were counter-productive because the employees felt that the results were ignored.

What happens when you do implement the results?

Over the long run, companies who listen to their employees and implement key suggested changes see an increase in engagement, productivity, and profitability. Gallup went so far as to estimate that actively disengaged employees in the U.S. cost their companies $254 to $363 billion annually. When companies focus on the problem, it is possible to increase the number of engaged employees significantly, resulting in an almost corresponding increase in profitability.

How much can you increase engagement?

While there is no set percentage, results have been as spectacular as double or triple percent increase in one year, and numerous companies have reported increases of 10 to 15 percent annually. In the employee engagement studies we have conducted, we have found significant data that leads to solid improvements in productivity and revenues.  To cite one example, we found a high correlation between a franchisor's optimum job profile and franchisee performance. Franchisees who fit the optimum profile generated royalties that were ten times the profile of a poor franchisee.  By using the profile when selecting new franchisees, the franchisor experiences a significant increase in royalties per franchisee. See our Franchise Case Study for more information.

The bottom line is that conducting and implementing changes prescribed in an employee engagement survey works.  For more information about how an employee engagement study will help your company, just give us a call at (800) 466-0105.