Organizational Effectiveness: Engagement Connection

It has become part of accepted business wisdom that engagement plays a role in how well an organization performs.  Most of us accept that as the workforce becomes more engaged, it performs at a higher level thus increasing the overall effectiveness of the organization.  Just as customer satisfaction tells us a considerable amount about the probability that a customer will shop with us again, employee engagement provides a good indication if an employee will give his or her best and remain with the organization.  An engaged workforce possesses a sense of ownership in the activities and values of the organization, shares a sense of ownership with coworkers as well as the organization, and links their individual success to the organization’s success.  Consequently, the more engaged the workforce, the more the workforce:

  • saves resources;
  • works better with others and embraces teamwork;
  • increases productivity with the same level of resources;
  • reduces accidents and works in a safe manner; and
  • utilizes less management time and resources to deal with day to day issues.

Moreover, these results directly impact the bottom line.  Gallup Research reported in 2009 that engaged organizations have 3.9 times the earnings per share (EPS) growth rate compared to organizations with lower engagement in their same industry.  A similar study in 2007 by McKinsey examining the barriers to agility and speed found that “employees lacking a sense of purpose commitment, motivation” is the largest inhibiting factor.  A slow organization performs less than optimally and many times falls below its market peers.

Obviously, the absence of these characteristics significantly impairs an organization’s ability to perform effectively.  What do successful organizations do to start realizing the benefits of an engaged workforce? The primary steps include subscribing to:

  • Engagement is accepted as key predictor of success
  • Engagement is part of the planning process
  • Engagement is part of the evaluation process

Engagement is Accepted as Key Predictor of Success

The transformation from assuming that engagement is something “nice to have” to realizing it is critical is taking place all around us.  The economic downturn has accentuated the need for more emphasis on engagement as employees have lost some of their connection to their employers and fewer resources are available to meet increasing demands.  Research by HCS in 2010 demonstrated that a workforce that is more than 65 percent engaged can be ten percent more productive than one that is less engaged.

Engagement is Part of the Planning Process

Most organizations develop specific strategies for meeting its revenue and profit goals.  Decision makers come together on a regular basis and assess the current situation, potential opportunities, and alternative plans of action to ensure that business success is not left to chance.  Most of us would agree that a firm that fails to do this type of planning is doomed to fail.  Based on this approach to goal attainment, some organizations have started to utilize similar methods in order to ensure that the right people are and will be part of their workforce.  The most progressive as well as successful organizations have discovered that employee engagement like other factors that fluctuate and impact business success needs to be planned for and managed.

Engagement is Part of the Evaluation Process

There is considerable truth to the statement that those things that we are held accountable for will be the things that are taken the most seriously.  If an organization evaluates it leaders on employee engagement, then engagement will be something time and effort is invested in on a regular basis.  A 2009 report by BestPractices, LLC found that 75 percent of high performing companies evaluate their managers on the level of engagement with their employees.  Conversely, only 35 percent of non-high performing organizations do the same.

Rachele Williams sums it up well, when she states “employee engagement is to HR what customer loyalty is to marketing and sales.”

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