Employee engagement and profit can seem like difficult metrics to square.
One is “soft,” having to do with people and their investment in their jobs and their company, and the other is “hard:” numbers. No executive team is going to sign off on a plan to increase employee engagement without some assurance that the Holy Grail – discretionary effort, with its corollary increase in productivity, and ultimately in profit – is a likely result.
To state the case plainly: engagement leads to profit and profit, wisely publicized and distributed, leads to engagement.
People want to work for a winner. And in correlating engagement and performance, it should hardly come as a surprise that the employees who go above and beyond – who invest that discretionary effort – are among the most engaged.
It may take time for the two different metrics to square satisfactorily. But having seen effects on the bottom lines of dozens of companies, I can tell you that it’s very difficult to have profit without engagement… and that engagement, once established, can see a company through leaner times and help to build it back up.
Perhaps surprisingly, a recession or market downturn is not necessarily a bad thing for engagement levels. And you shouldn’t be afraid to prune. In fact, given the strong link between poor performance and disengagement, a good place to start might be the aforementioned 15 percent who are disengaged but staying put!
When companies are busy and the job market favors employees, remember that your engaged employees are watching you. You need to keep them engaged without hauling dead weight.
Beware of “Employee Satisfaction to Bankruptcy”
Employee satisfaction is an outcome, not a goal. You may bolster engagement by offering good salaries and benefits, but ultimately the goal is high performance, not satisfied employees. The last thing that anyone wants is a staff populated with satisfied underperformers!
In fact, high performers often become frustrated and disengaged if they see lackluster coworkers receiving the same bonuses or perks that they themselves receive. They will wonder, “Why doesn’t management do something about these poor performers?” And regardless of the personal satisfaction they may take in their jobs, they may begin to doubt the judgment and vision of an employer who does not address the discrepancy.
I do believe there is a correlation between employee satisfaction and employee engagement. It isn’t likely that you would be engaged but not satisfied, although you can be satisfied but not engaged.
Profit is the lifeblood of the organization. And if you lack engagement, gains in profit will be temporary. Conversely, I believe that if you lack profitability over time, engagement levels will drop. Healthy companies sustain both.
The right fit
When I’ve worked with executives to improve engagement at their companies, I often find that the root of the problem is at the hiring stage.
Some companies don’t have an engagement problem, they have a hiring problem. The people in charge of interviewing new recruits have to be informed of the company’s vision and its employment brand – otherwise they will not be able to articulate the culture to a potential new employee.
If you are hiring the wrong cultural fit from the outset, it will be difficult to get those people invested in your organization and working alongside you to achieve your goals.
After all, the vast majority of employees join organizations engaged. You don’t hear anyone saying, “I’m joining this company that I hate.”
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But studies show that those initial levels of engagement are not replicated until the seventh year of employment. It takes years for most individuals, who confront a new job with enthusiasm, hope, and considerable personal investment, to find the equilibrium that will incline them to be invested in the greater cause of their organization… and to go above and beyond in their efforts, as they did when they first were hired.
History is filled with companies like Digital Equipment Corporation or Wang Labs who claimed they would never have layoffs. This is not a realistic promise to make, nor should you paint yourself into a corner with such assurances. Firings and layoffs are sometimes necessary. Most employees understand this, and it is far better to be frank about the necessity than to overpromise and underdeliver.
Shortly after my former employer, environmental consulting firm ENSR, embarked on its journey to become an “Employer of Choice,” the tragedy of 9/11 put a frost on work in the energy sector, a key client market, resulting in layoffs. Obviously, we were concerned that our efforts at engagement would be perceived as hypocritical.
But in conducting employee engagement surveys, we learned that on some levels, we’d been almost too sparing in our staff cuts. Our people let us know that allowing mediocrity and poor performance to go unchecked negatively impacted the engagement levels of others.
In some cases, it even bred suspicion: “Why does Michael get to stay? Is it because he’s friends with the Vice President?” Following the layoff, our Employee Engagement Survey scores actually went up.
High-performing companies identify and act on non-performance before there is an economic reason to do so. Remember – you don’t want to be an “Employer of Choice” for mediocrity! The key is to retain and empower the employees who are engaged, and work on the engagement levels of others.
If you can’t increase the engagement levels of those who are disengaged, you need to be counseling them out of your firm. The true opportunity lies in increasing the engagement levels of the moderately engaged: approximately 71 percent of your workforce (according to Towers Watson).
If you have high engagement but low profitability, you are much better situated to recover than if you have a staff of satisfied underperformers. A high-profit business with low engagement scores is a mansion built on sand.
Excerpted from Louder Than Words: Ten Practical Employee Engagement Steps That Drive Results, by Bob Kelleher. Copyright ©2010 by Bob Kelleher. Published by BLKB Publishing, 7336 SE Tibbetts Street, Portland, Oregon, 97206. All rights reserved.